Infrastructure management faces multiple risks due to its long-term nature, the large sums involved, the complexity of transactions – especially those requiring complex financial schemes, such as public-private partnerships (PPPs) or concessions, and procurement methods – and the multiplicity of stakeholders. These risks include cost overruns, delays and failed procurements, among others. Issues with the design, utility and construction of infrastructure projects are not always simple to rectify once they are completed. Therefore, it is essential to adopt a comprehensive approach to risk management from the outset, covering the entire infrastructure life cycle. This entails ensuring adequate risk allocation through the procurement strategy, early involvement of affected stakeholders, and the use of quality data to support evidence-informed decision making, among others.
Infrastructure assets have long lifespans and are particularly prone to risks, including inefficiency, poor quality, cost overruns, economic and financial uncertainty, and integrity breaches. Indonesia, the Philippines, and Singapore have processes in place to identify, allocate and mitigate risks during the investment life cycle (Figure 4.6), as do several OECD Member countries in the Asia-Pacific region. For example, Indonesia has established the Indonesia Infrastructure Guarantee Fund to safeguard the creditworthiness of PPP projects by providing government guarantees. This aims to support infrastructure financing by attracting private sector investment. Twenty of 31 OECD countries have similar processes in place.
Stakeholder participation can help to ensure that infrastructure projects are more predictable and have fewer delays, and that their benefits are distributed more evenly. Early-stage participation means involving stakeholders and the public in infrastructure decision making during planning, appraisal, funding, design and procurement, that is, when key decisions can still be influenced. The four SEA countries for which data are available mandate stakeholder consultation on the environmental impacts of infrastructure investments at early stages (Figure 4.7). Singapore, for example, conducted extensive stakeholder and citizen engagement during its Long-Term Plan Review, including through public polls, workshops and dialogues. Early-stage participation is also common across OECD countries, with 27 of 29 countries undertaking it. Late-stage participation involves stakeholders and the public during the construction, operations, maintenance and decommissioning of infrastructure. This practice is less developed. No SEA country currently mandates late-stage consultation, and among OECD countries, only 13 of 29 mandate it.
Evidence-informed decision making in infrastructure development is crucial for delivering quality infrastructure and for effectively and efficiently managing assets. It is important that governments systematically collect, store and manage data throughout the infrastructure life cycle, and use this to inform decisions such as project appraisal and procurement. Such data can help better understand the specific infrastructure needs, challenges and opportunities, enabling more targeted and effective investments. Indonesia, the Philippines, and Singapore collect, analyse, disclose and use data on exposure/vulnerability to environmental and weather risks to inform their infrastructure decision making (Table 4.8). Indonesia and the Philippines also cover data related to damages and economic loss of weather events. Indonesia additionally covers data on losses due to weather events. Singapore covers data related to the impact on biodiversity, and the Philippines covers both of these categories, in addition to data on the depletion of natural resources.
