More than 200 Construction and infrastructure sector professionals from around the world gathered online at a webinar on 16 November June 2021 to discuss how FIDIC, its member associations, stakeholders and the various international financial institutions and the private sector can work better together at the latest event in FIDIC’s ongoing committee webinar series, writes FIDIC communications advisor Andy Walker.
The latest webinar in the series, Sustainable infrastructure investment needs and challenges: ‘Partnership with purpose’ - working with the international financial institutions, looked at how key industry and financial stakeholders could develop a more effective partnership (a ‘Partnership with purpose’) to tackle the need for sustainable investments in global infrastructure. The webinar also examined key themes like the funding of Infrastructure, better (total benefit) infrastructure solutions, sustainable and resilient infrastructure, financing modalities and effective delivery through transparency and contract standardisation.
The webinar was moderated by Manish Kothari, president and CEO of Sheladia Associates in the US and chair of the FIDIC international financial institutions committee. Panellists included Jerome Haegeli, group chief economist at Swiss Re from Switzerland, Rajat Nag, fellow at the National Council of Applied Economic Research from India, Yumiko Noda, chairman and representative director at Veolia Japan, Nazir Alli, resident advisor at Syneru in South Africa and Dr Bindu Lohani, a fellow at the Emerging Market Forum from the USA. They were joined at the event by FIDIC president Tony Barry and chief executive Dr Nelson Ogunshakin.
Introducing the webinar, FIDIC chief executive Dr Nelson Ogunshakin, said that a discussion around sustainable infrastructure was highly appropriate in the aftermath of the recent COP26 event in Glasgow, Scotland. FIDIC president Tony Barry highlighted the urgent need to improve the resilience of infrastructure on a global scale, a task which had become even more important and urgent given the global climate crisis, he said.
Kicking off the event, Manish Kothari, president and CEO of Sheladia Associates in the US and chair of the FIDIC international financial institutions committee, highlighted the need to engage with governments and private investors to ensure that there was a better balance between risk and fair returns in the infrastructure sector.
First speaker Dr Bindu Lohani, a fellow at the Emerging Market Forum from the USA, highlighted some of the positives arising from the recent COP26 conference, which included a clearer understanding of the need to reduce emissions especially in the developing world. Lohani spoke about the growing importance of ESG (environmental, social and governance) considerations around sustainable investment and said that this would mean that consultancy firms would need to “shape up” to address this challenge. He also said that the international financial institutions (IFIs) had a key role to play in leveraging funds from the private sector. “IFIs could be a very good partner for the private sector,” Lohani said, stressing the importance of working better together.
The next speaker, Nazir Alli, resident advisor at Syneru in South Africa, said there was a need to be aware of the challenges of working across a continent as diverse and as large as Africa. He said that there were different approaches in different countries and you could not see the whole of the continent as all the same. “There are 54 countries across the continent with different challenges and needs,” he explained, which highlighted the complexity of working in the region. Speaking about the key role of project finance, he said: “If you do not have a well-functioning private sector in a country then you will face challenges, but we need to work in partnership across governments, sectors and institutions to be successful,” Alli said.
Rajat Nag, fellow at the National Council of Applied Economic Research from India, said that the main source of investment in global infrastructure would be the private sector and host governments in areas like Asia and Africa would have a key role to play in encouraging that investment. “Consultants will also have a key role to play, but as an enabler in the process,” he said. Asking why the private sector was not as involved as it needed to be in project investment, Nag said that this was because of the lack of bankable projects. While governments could do more to facilitate in this area - and they should – the private sector also needed to be more aware of its social responsibilities around infrastructure, he said. The entire sector needed to take a “reality check” about what was needed and consultants would have a key role to play in this in terms of the advice and guidance it gave to clients and funders. “Partnership with a purpose is all very well but we need to ask about what that partnership looks like and who is it with,” Nag said.
Yumiko Noda, chairman and representative director at Veolia Japan, highlighted some of the challenges involved in the public and private sectors working together. Risk was an issue, she said, and the public sector had a role to play, especially in dealing with political risk. There needed to be more open dialogue between the sectors to foster better understanding of the risks and challenges involved in project development and delivery, Noda said. “Especially today, with the use of digital tools, the private sector can bring innovations to improve infrastructure delivery, but the public sector might not be able to assess these tools, so there needs to be closer working with engineers to help calculate lifecycle costs, risks and social value,” she said. There needed to be a clear recognition of the division of roles and expectations of stakeholders (both public and private) through open dialogue facilitated by engineers, Noda said. “With the help of expert engineers, we can help to close the investment gap,” she said.
Jerome Haegeli, group chief economist at Swiss Re from Switzerland, said that you could not talk about infrastructure investment without discussing sustainability. The two were inextricably linked, he said. “There can be more investments done by the MDBs but they also need to encourage investment from the private sector and help to develop a best practice approach. We need a tradable market,” he said. Addressing the issue of regulation, Haegeli said that there was a need to ensure that long-term investment in infrastructure was better incentivised and for climate risk to be greater understood. “We need to unlock private investment and political leaders need to sign off on the risks involved in taking a long-term approach to the challenges facing the world.
Many of the questions from attendees echoed a number of points raised by the panellists, especially in the area of risk, regulation and forging better partnership working between the public and private sectors. Many contributors in the webinar chat highlighted that FIDIC had a key role in facilitating more equitable partnerships through the use of its standard construction contracts, which were widely used and very well regarded around the world.
Summing up the event, FIDIC president Tony Barry praised all the speakers for the high level of their contributions and thanked them for taking time out to discuss such a key issue for the industry and indeed the world. It was crucial that the issues around working in partnership were being discussed as this was critical in achieving project success, he said. He looked forward to FIDIC facilitating more such discussions going forward and the organisation playing an increasingly influential role on the global stage.
The next FIDIC online event is the 2021 Official FIDIC International Contract Users’ Conference, which takes place from 7-9 December 2021. Places cost €275 with discounts for multiple bookings. Please register your place as soon as possible to secure your place.
Webinar recording
