Sound infrastructure is vital for the long-term growth and competitiveness of emerging economies. In Asean, improvements to connectivity and energy supplies are helping to improve the standard of living and making countries in the region increasingly attractive for investors. Expanding economies like the Philippines are demanding an even greater focus on the development of infrastructure, but the success of the Aquino administration in delivering infrastructure remains extremely limited. And with the coming elections, the chances that infrastructure is developed is undermined by the fact that this administration becomes more and more ineffective and that the next administration will be effective only in early 2017—a vital 18-month period to be lost.

Governments in the region are providing investment in transportation and power-supply networks, alongside a raft of improvements to bolster their economies, help rural communities and to serve the growing need of their expanding cities. The task is enormous and this is reflected in projected investment costs.

The region will need to spend $950 billion on infrastructure by 2020, to see that its economies grow and develop, according to a study undertaken by the Asian Development Bank.

Improvements to water supplies, sewage networks, energy and other basic utilities can no longer be delayed. New railways, highways, ports, airports, power stations, dams and hydro schemes all feature in this promised overhaul. The Philippines aims to spend 5.2 percent of gross domestic product on infrastructure projects by 2016, compared to 2.2 percent in 2013. While the Aquino administration launched massive public-private partnership (PPP) ideas for infrastructure investments, the sad story is that most of them are still in the planning stage, failed bidding stage or a very early implementation stage. As European Chamber of Commerce of the Philippines, we are supporting three bills debated in committees of Sen. Ferdinand R. Marcos:

The PPP bill;
The build-operate-transfer law amendments, and
The right-of-way law amendments.
We trust that these three pieces of legislation can be finished by the 16th Congress so that the next administration has more tools to implement badly needed infrastructure.

The case of railway development within, and between Asean countries with land borders is clear cut. The move from trucks and buses to railways will meet economic, social and environmental requirements.

In an archipelagic region that includes some 24,000 islands spread across 5,200 kilometer east to west and 3,400 km from north to south, Southeast Asia is defined by the sea.

The maritime sector is crucial to Asean countries’ connectivity, with shipping services, ports, shipbuilding and seafaring core activities, in vast parts of the region. For centuries the region has been a crossroads of global seaborne trade, a fact reflected in the scale of Asean’s maritime industries.

The creation of the Asean Economic Community is based upon the free flow of goods and people. This, in turn, depends on the establishment of an efficient and integrated maritime transport sector in the region. Possessing access to the world’s oceans is little advantage without modern ports, sound logistic facilities and effective management of maritime facilities. There are many areas requiring improvements in order to promote a safe, modern, efficient and competitive shipping sector in the region.

There is a shortage of airports in many parts of Southeast Asia and even international airports serving major cities in the region are running out of capacity and increasingly stretched by millions of passengers. One consequence is that new landing slots are becoming hard to obtain. The entry and rapid development of budget airlines is responsible for much on the increased traffic. Growth of discount carriers has been phenomenal and they continue to drive the aviation market in the region.

Whatever the funding mechanism chosen, Asean’s massive infrastructure overhaul is under way and due to build up considerable momentum. 

Source: Business Mirror