Global infrastructure investment at risk



    TORONTO, Aug. 4 /CNW/ - North American infrastructure projects and
investments are burdened by cumbersome decision-making, despite concerted
efforts by all levels of government to increase infrastructure spending,
according to a KPMG International ("KPMG") survey entitled Frontline Views
from Private Sector Infrastructure Providers.
    The global survey by KPMG, conducted in cooperation with the Economist
Intelligence Unit, surveyed 455 infrastructure executives globally, including
129 from North America. "The key findings from the survey are remarkably
consistent in the responses around the globe," said Stephen Beatty, a Partner
with KPMG in Canada, and Americas Leader for KPMG's Global Infrastructure
practice. "They also closely follow the sentiments expressed by business
executives earlier this year in another report-Bridging the Global
Infrastructure Gap: Views from the Executive Suite." Beatty led the research
project for both reports. Key findings are:

    
    -   Concern regarding governmental effectiveness - Respondents cited
        governmental effectiveness as their biggest concern

    -   Improving processes and partnering - Almost half of global
        respondents cited depoliticization of infrastructure projects,
        increased transparency, and greater use of public-private
        partnerships

    -   Government support for financing - More than a third of all
        respondents believe that more government intervention is required,
        including direct contributions, co-lending, more favorable risk
        allocation, and loan guarantees

    -   Insufficient investment - Almost half of all respondents are very
        concerned that levels of infrastructure spending are insufficient.
        Almost three-quarters of respondents are concerned that spending is
        not enough to sustain their business' long-term growth

    -   Long-term skills training - Almost half of all respondents expressed
        concern about a lack of availability of people and skills.
    

    Because government decision-makers are perceived as viewing
infrastructure too often through a political lens, they are also blamed for
not taking the problems in this area seriously enough by failing to provide
consistent, long-term leadership. Lack of a sense of urgency, frequent changes
in public policy, and even a lack of an appropriate policy were all cited by
more than a quarter of global survey respondents as leading public sector
impediments in this area.
    "National governments cannot meet the challenge of providing 21st century
infrastructure alone," said Nick Chism, Head of KPMG's Global Infrastructure
and Projects group. "Much has been said about the role of public-private
partnerships in delivering the necessary infrastructure improvements and
squeezing every last drop of efficiency out of investments from the public
coffers. However, partnerships tend to work best when both sides have faith in
the other's ability to deliver what is expected of them."
    When asked what they saw as the greatest public sector impediments to
more infrastructure investments in their respective countries, 36 percent of
North American infrastructure providers indicated the politicization of
infrastructure project priorities, 31 percent indicated a lack of sense of
urgency, 30 percent indicated frequent changes in public policy, and 26
percent indicated a lack of appropriate public policy.
    Asked about which factors would likely produce the greatest improvement
in governmental effectiveness for infrastructure investment, 47 percent of
North American respondents indicated de-politicizing infrastructure public
policy, 38 percent indicated more transparency in infrastructure planning and
project selection, 36 percent indicated greater use of public-private
partnerships, and 28 percent indicated more transparency in infrastructure
spending.
    "The infrastructure process will never be completely depoliticized and
nor should it be-it is an emotive topic involving large amounts of taxpayers'
money," said Stephen Beatty. "However, the private sector providers are quite
clear on how they believe certain aspects of the political process are slowing
or preventing the delivery of much-needed infrastructure improvements."
    Transparency also features heavily in the survey, with almost half of
providers keen to see greater transparency around infrastructure planning and
project selection. Forty percent of respondents also advocated greater use of
public-private partnerships; an encouraging response, which suggests
that-despite all the perceived problems-the appetite to partner with
governments still remains.
    "Both infrastructure providers and business leaders agree that delivering
needed infrastructure projects is more than a nice to have-it's a fundamental
building block supporting our Canadian economy as well as the global economy,"
said Beatty. "National competitiveness is what's at stake and substantive
actions are required, not more talk."
    Other findings of the survey include:

    
    -   Forty-three percent said that the most viable source of increased
        funding for infrastructure in their respective countries is effective
        disposal of existing assets

    -   Sixty-eight percent cited more steady spending to maintain existing
        employment and skill base, as a means to improve the availability of
        relevant skills and people for infrastructure investments

    -   Sixty percent indicated that designing infrastructure with a greater
        emphasis on minimizing resource use was required to ensure the
        necessary resources and raw materials for infrastructure building and
        refurbishment in their respective countries.
    

    About KPMG in Canada

    KPMG LLP, a Canadian limited liability partnership established under the
laws of Ontario, is the Canadian member firm affiliated with KPMG
International, a global network of professional firms providing Audit, Tax,
and Advisory services. Member firms operate in 144 countries and have more
than 137,000 professionals working around the world.

    www.kpmg.ca





For further information:

For further information: or to arrange a media interview, please
contact: Mark Klein, Manager, Media Relations, KPMG in Canada,
mklein3@kpmg.ca, (416) 777-3895; Julie Bannerjea, Senior Manager, Media
Relations, KPMG in Canada, jbannerjea@kpmg.ca, (416) 777-3243


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