The Changing Face of Infrastructure

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GLOBAL INFRASTRUCTURE The Changing Face o Inrastructure: Public sector perspectives Global research commissioned by KPMG International rom the Economist Intelligence Unit KPMG INTERNATIONAL

Transcript of The Changing Face of Infrastructure

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GLOBAL INFRASTRUCTURE

The Changing Face o Inrastructure:

Public sector perspectives

Global research commissioned by KPMG International

rom the Economist Intelligence Unit

KPMG INTERNATIONAL

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© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

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Contents

About the survey 2

Foreword 3

KPMG’s view 4

The survey report 6

Appendix 13

Due to rounding graph totals may not equal 100 percent.

The World Bank denition o “governmental eectiveness” was provided to respondents during the

survey, and specied as “the quality o public services, the quality o civil service and the degree o its

interdependence rom political pressure, the quality o policy ormulation and implementation, and the

credibili ty o the government’s commitment to such policies.”

© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

  The Changing Face o Inrastructure: Public sector perspectives

In order to understand the challenges that public sector ocials ace in creating and

maintaining inrastructure, the Economist Intelligence Unit (EIU), commissioned by

KPMG International, conducted a survey in November and December 2009 o 392

senior public sector ocials involved in inrastructure policy, procurement or

development. O these, 47% were at the level o senior manager or above. Thirty-

seven percent came rom organizations that operate at the city or local level, 28%

rom those at the state or regional level, and 35% at the national or ederal level. None

were elected ocials. Respondents came rom 50 countries and territories around the

world, including Europe (32%), North America (32%), Asia-Pacic (30%), Latin

America (3%) and the Middle East and Arica (3%).

About the survey

© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

This is the third inrastructure ocused survey that KPMG International has

commissioned rom the Economist Intelligence Unit (EIU). The rst survey looked

at views on inrastructure amongst business leaders generally. The second

surveyed those companies involved in the delivery o inrastructure. This time EIU

surveyed 392 senior public sector ocials involved in inrastructure policy,

procurement or development across the globe.

The headline result o this survey is that despite the belie that the stimulus monies

mobilized in the past two years will help in meeting medium-term inrastructure

needs, these unds still all well short o being a sustainable solution to the ar

greater long-term challenges o global inrastructure development. It is also clear

that given limited public sector resources, many governments and the private

sector would be well-advised to work better in partnership to deliver inrastructure

more eectively.

A renewed push or deeper collaboration is only one starting point. Many

governments ace dicult decisions as they try to balance budgets whilst

continuing to invest in inrastructure. Prioritization o inrastructure development is

critical to maintain economic growth and address the needs arising rom a growing

global population.

We believe it is important to continue to survey the views o leading individuals

concerned with inrastructure related issues and, in uture, we will be taking acloser look at the issues highlighted by this report. In the meantime, this survey

should oer industry leaders important issues to consider as well as a backdrop

against which to debate those issues.

Nick Chism

Head o Global Inrastructure

Partner, KPMG in the UK

Stephen Beatty

Americas Region Leader or Global Inrastructure

Partner, KPMG in Canada

Julian Vella

ASPAC Region Leader or Global Inrastructure

Partner, KPMG in Australia

Foreword

The Changing Face o Inrastructure: Public sector perspectives 

As the global economy recovers rom the economic and nancial turmoil o 2008-2009,

it is crucial to refect upon next steps to support inrastructure development – a key part

o stimulus programs worldwide. Seeking views and opinions rom leading public

sector ocials involved in inrastructure has been a valuable exercise towards this end.

© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

  The Changing Face o Inrastructure: Public sector perspectives

By bringing together the views and

opinions o these three groups, we

can get a better picture o where

the uture or the industry could lie.

Business leaders are saying that the

lack o inrastructure is holding backthe economy. Inrastructure

providers eel that the government

is not responding appropriately,

whilst public sector ocials think

that stimulus packages are an

inadequate solution. Unless a way

orward is ound, inrastructure

development could potentially

hinder economic growth across

the world. We rmly believe that the

solution should involve the public

and private sectors working closer

together in partnership.

Stimulus is only a start

Whilst the global nancial and

economic crisis have prompted

many governments to launch

stimulus packages and direct

unding towards inrastructure, this

initial unding only gets us over thestarting line in the longer term

challenge o meeting global

inrastructure needs. In the public

sector’s view, as refected in the

ndings o this survey, the

inadequacy o stimulus money

beyond addressing some near-term,relatively smaller-scale needs is

unequivocal: the lack o stable,

adequate, long-term nancial

resources is considered by

respondents the greatest

impediment or inrastructure

investment.

In terms o the stimulus packages,

spending ast and spending well

is a challenge in its own right.Governments around the world

want to spend stimulus money in a

manner that generates the greatest

possible economic impact in the

short term while also raising the

long-run productivity o the local

economy. These two aims are oten

complex to reconcile, especially in

the case o new build projects.

The nancial and economic crises

created this pathway or short term

stimulation. But is there a cost to

longer term inrastructure

investment or will these tangible

short-term benets whet the

appetite or making longer-term

investments a signicant priority?

Private sector involvement

is crucial

The public sector acknowledges

that the private sector should be

part o its solution or delivering

inrastructure more eectively.

The skills, resources and innovation

o the private sector, deployed

worldwide, alongside those o the

public sector, are needed to address

the inrastructure challenge.

However, it is important to

understand that the involvement

o the private sector alone cannot

solve governments’ long-term

inrastructure unding challenges.

Inrastructure must be unded rom

taxes raised, service charges levied

to users or contributions made by

third party beneciaries such asproperty developers.

KPMG’s view

This survey is the third in an ongoing series commissioned by KPMG International

rom the EIU. In prior editions we sought the views o private sector business leaders

across industries and inrastructure providers. In this current survey, we close the loop

with views rom the public sector.

KPMG’s interpretation o the survey results

© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

The Changing Face o Inrastructure: Public sector perspectives 

A key to ensuring successul

cooperation and extracting value

rom limited unds is to nd

mechanisms or harnessing private

sector skills eectively. This survey

highlights some o the culturaldierences between the public and

private sectors as an important

barrier to address in this area.

The inrastructure industry should

consider ways to improve the

relationship between the public

and private sector and ocus on

incentivizing partnership behavior.

Governments can do better

Governmental eectiveness is an

issue – and not only in the eyes o

the private sector. Public sector

ocials surveyed put their hands up

and admitted: “Yes, we can do

better”. The public sector survey

respondents included suggestions

or more ocus on training,

increased transparency and

accountability, as well as taking

short-term political considerations

out o the process o planning how

best to manage long-term

inrastructure needs.

Competing objectives and

misaligned incentives appear to be

a major challenge. They exist, in

particular, in systems that

incentivize short-term thinking,

rather than thinking through the

long-term consequences o

inrastructure development. This

situation is oten made worse by a

lack o good quality inormation and

a lack o specialist skills.

First-class inormation can help

de-politicize inrastructure

Eective consultation o the

appropriate stakeholders is

paramount, whether in the context

o a new construction project or a

disposal o an existing piece o

inrastructure. The more open the

conversations, and the harder and

more robust the evidence base to

support process, the stronger the

consensus on the way orward.

Stakeholder consultation can help

in de-politicizing and increasing

transparency o decision-making on

inrastructure projects, two issues

highlighted in the survey as

important by government ocials.It is easier to agree i the acts are

clear and veriable.

Final thoughts

This survey illustrates that

increasing accountability and

transparency is a way orward,

whether in the context o getting

more out o stimulus money or

locking in long-term outcomes rom

inrastructure. The survey strongly

supports the increased involvement

o the private sector, which is likely

to help in delivering additional

inrastructure more eectively.

Increased private sector

involvement is not a total solution

and the public sector should also

bear responsibility or how it

leverages the private sector to best

add value.

© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

  The Changing Face o Inrastructure: Public sector perspectives

The survey report

Corporate executives and private sector inrastructure providers point to a lack o

eectiveness within the public sector as a major hurdle to a more ecient inrastructure.

A survey o 328 C-level executives and board members conducted by the

Economist Intelligence Unit (EIU), on behal o KPMG International , ound that 68

percent rated government eectiveness as a concern in this regard – making this

their biggest worry, surpassing even economic conditions.1 A subsequent survey o

455 executives rom inrastructure providers ound an almost identical number

(69%) expressing great concern that public sector ineectiveness would inhibit

their industry’s ability to deliver what their countries need.2

In order to nd out i the private sector views are warranted, the EIU on behal o KPMG

International, conducted a survey in November and December 2009 o 392 public

sector ocials involved in inrastructure policy, procurement or development. Eighty-

one percent o these survey takers agree that the concerns are justied. Other key

ndings include:

Stimulus money is not eliminating the pressing need or inrastructure unding.

Headlines about the amount o stimulus money going into inrastructure grab

attention. China has set aside up to hal a trillion dollars, the United States some

U.S. $150 billion, Canada U.S. $14 billion, Germany U.S. $18 billion, the World Bank

U.S. $55 billion, – the list goes on.3 

Even with this sort o expenditure, however, the survey shows that public sector

inrastructure ocials see a lack o unding as the leading inrastructure problem

worldwide. With regard to their own organizations, respondents say that a lack o

unding is the single largest impediment to eective delivery o inrastructure, cited

by hal o respondents.

Written by the EconomistIntelligence Unit

1 Bridging the Global Inrastructure Gap: Views rom the Executive Suite, January 2009

2 The Changing Face o Inrastructure: Frontline Views rom Private Sector Inrastructure Providers, August 2009

3 The Changing Face o Inrastructure: Frontline Views rom Private Sector Inrastructure Providers, p.7.

4 Bridging the Global Inrastructure Gap, p.16, The Changing Face o Inrastructure, p.10.

Levels of Concern Regarding the Availability of Financing

1–2

1 = very concerned and 5 = not at all concerned

3 4–5 Don’t know

0% 25% 50% 75% 100%

Public Sector

InfrastructureProviders

Senior Executives

1%69% 18% 12%

<1%60% 21% 19%

56% 26% 18%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

The Changing Face o Inrastructure: Public sector perspectives 

Looking ahead, 69% are concerned that a lack o nancing will inhibit their

organization’s ability to provide the necessary inrastructure to support long-term

economic growth within their jurisdiction. This indicates that the public sector sees

availability o nancing as an even more pressing issue than do senior executives as

a whole (56%) and private sector inrastructure providers in particular (60%).4 Nor do

public sector respondents see help on the horizon: 67% are concerned that the

economic situation will inhibit their ability to deliver the needed inrastructure.

Too little cash is a particular issue at the local level: 66% o respondents working

or cities or local governments, or example, cited a lack o money as a leadingimpediment to deliver inrastructure more eectively, compared to 36% o those

at the national level. Seventy-one percent o those working at the city level also

see insucient unding as the biggest impediment to higher investment in their

jurisdiction, compared to 40% o those at the national level.

In the downturn, national governments have spent more on inrastructure as an

economic policy response. But many cash-strapped lower levels o government

have cut back at the same time. A survey by Globescan or the United States

Conerence o Mayors in April and May 2009, or example, ound that 77% o cities

had lower inrastructure budgets in 2009, including more than one in ve who

expect the drop to exceed 15%.5 Available stimulus unds have not been lling the

gap quickly enough. In act, respondents cite a slow approval process (50%) as thegreatest impediment to spending such money eectively.

The situation in the United States illustrates how these actors are working

together. American respondents show a higher than average concern about

unding: 66%, or example, see inadequate unding as interering with their own

organization’s ability to deliver inrastructure more eectively; 69% see a lack o

unding as the greatest impediment to more public sector investment in the area;

and 78% are very concerned that the availability o nancing will impede their ability

to provide the inrastructure the country needs or long-term growth.

The politicization o inrastructure delivery and inconsistent political will are

creating investment uncertainties and hampering eective policy-making

and outcomes.

Among survey respondents, 58% are concerned that the political environment in

their jurisdiction will impede them rom delivering the inrastructure needed or the

long term.

Several actors play a large role in dening this environment. The rst is a lack o

consistent ocus by governments on inrastructure. Ater unding, respondents cite a

lack o political will as the second leading barrier to more eective provision by their

organizations (38%). In third, they put lack o a sense o urgency (27%). The last

5 The United States Conerence o Mayors, Metropolitan Inrastructure Sustainability Study: A research project prepared

by GlobeScan and sponsored by Siemens, 2009.

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  The Changing Face o Inrastructure: Public sector perspectives

© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

problem is particularly pronounced at the national level, where the impact o poor

inrastructure may be less immediately apparent. For respondents rom that level ogovernment a lack o political will is the greatest hurdle to better delivery by

respondents’ organizations (40%).

Surveyed public sector ocials – none o whom are elected – also expressed

concern about the politicization o the whole eld o inrastructure. Here they are

not alone. Private sector inrastructure providers considered politicization the

greatest impediment to inrastructure investment (42%), and conversely that

de-politicizing the relevant policy processes was the most requently cited method

or improving government eectiveness in this area (45%).6 

Respondents in the current survey generally agree. Only 3% believe that

inrastructure delivery prioritization does not need to be de-politicized. Instead, a

third say that politicization o such priorities is a leading impediment to greater

investment in inrastructure – the second most common answer – and 35% believe

that de-politicizing it is an important way to improve inrastructure development

where they work – again the second most requent reply.

Among survey respondents, the most common suggestion or how to de-politicize

inrastructure priorities is greater transparency (cited by 41%). Other leading solutions

involve nding ways better to insulate long term commitments rom short term

political cycles, including a greater use o public-private partnerships (37%);

establishing cost-benet methodologies or inrastructure projects (36%) and setting

and enorcing ormal guidelines or the creation o inrastructure priorities (34%).

6 The Changing Face o Inrastructure

Public Sector Suggestions for the Most Effective Ways

to De-politicize Project Prioritization

Increase transparency in infrastructureproject selection

Improve the public private partnershipprocurement process

Develop and adopt better cost-benefitmethodologies to quantify project outcomes

Establish and enforce guidelines forsetting infrastructure priorities

Increase stakeholder involvement

Improve identification of financial/social costs and benefits

Improve allocation of financial/social costs and benefits

Other

I disagree — the process doesnot need to be de-politicized

Don’t know

0% 20% 40% 60% 80% 100%

41%

37%

36%

34%

33%

32%

24%

3%

3%

3%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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The Changing Face o Inrastructure: Public sector perspectives 

© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

Public sector ofcials acknowledge that government eectiveness is a serious issue.

Twenty-three percent o respondents agree that the concerns about government

eectiveness voiced by private sector inrastructure providers – that it is the most

widespread obstacle with respect to inrastructure delivery – are “very justied.”

A urther 58% call them “somewhat justied” and only 12% say that there is no

justication or them. Even more telling, 59% o public sector ocials have a high

level o concern over a lack o governmental eectiveness impeding their ability toprovide inrastructure – the most widespread worry ater unding and the economic

environment, and not all that ar rom the 69% in the earlier survey.

A major reason is money: 35% point to the size o budgets or projects as a leading

obstacle to the eectiveness o public sector’s management o inrastructure.

Equally important, however, is the lack o direction provided by decision takers:

35% blame a lack o consensus among policy makers and stakeholders over

priorities or the problem. Survey takers also indicate that poor management

practices have a marked impact on eectiveness. Thirty-one percent see a lack o

accountability as a leading obstacle, the same proportion that say there is too little

perormance management, and 28% cite insucient perormance-based pay.

Ineective control, accountability, and transparency measures are hurting

the ability o governments to deliver inrastructure.

However uncomortable a topic, public sector ocials also recognize that the

misuse o unds is a serious inrastructure issue. It is the area where they are least

likely to rank themselves as eective (only 39% do so). In act, 55% describe

themselves as at best mediocre, including almost one in eight admit to being not at

all eective here.

1–2

1 = very concerned and 5 = not at all concerned

3 4–5 Don’t know

0% 25% 50% 75% 100%

Public Sector

InfrastructureProviders

Senior Executives

1%59% 27% 13%

1%69% 18% 13%

68% 17% 15%

Levels of Concern Regarding Governmental Effectiveness

Inhibiting Infrastructure Development

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

The Changing Face o Inrastructure: Public sector perspectives  11

But cultural dierences stand in the way. Respondents say that the biggest

impediment (45%) the public sector to work eectively with the private sector in all

areas o inrastructure is the range o cultural dierences between the two.

These cultural issues lead to a lack o trust between the public and private sectors

– mentioned by 27% and the third most requently cited impediment – and

sometimes even conrontational relationships, cited by one in seven. When asked

specically about their own organizations, 27% say that their internal attitudes

would need to change in order to work more closely with the private sector

– the second most common issue ater shortage o cash.

This problem is again even more pronounced in developing countries, where 41% say

that a lack o trust is a leading barrier to greater cooperation with the private sector

where they operate, the most common answer. Also, 30% cite internal attitudes

at their own organizations, tied or rst with use o perormance-based measures.

These attitudes will inevitably slow progress in improving inrastructure and take

time to overcome. The Indian government’s attempt to upgrade its Industrial

Training Institutes through public-private partnerships, or example, has spent only

a th o its allocated budget, largely because o the cultural mismatch between the

two sectors is creating extensive delays. “You can’t expect a cultural transormation

over night,” explains S J Amalan, a regional director with the Directorate General o

Employment and Training.10 

10 Shreya Biswas, “Work culture dierences take toll on PPPs in ITIs,” 11 August 2009, The Economic Times, http:// 

economictimes.indiatimes.com/News/News-By-Industry/Jobs/Work-culture-dierences-take-toll-on-PPPs-in-ITIs/ 

articleshow/4880017.cms

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

1  The Changing Face o Inrastructure: Public sector perspectives

Conclusion

Public sector ocials and private sector executives in the eld o inrastructure do

not see the world very dierently rom each other. They may dier slightly about the

relative approach towards creating the improved inrastructure environment which

countries around the world urgently need. But both groups recognize the mostserious impediments or doing so: insucient unding, a lack o engagement by

policy makers, excessive politicization, and shortcomings in government

eectiveness.

What this, and the earlier surveys, also make clear is that there is no quick x. A

food o stimulus money will not alleviate the problem. Increased transparency,

better trained inrastructure agencies, and greater public-private cooperation all hold

out the possibility o improved results, although it will be dicult to overcome long-

entrenched cultural dierences rapidly. Indeed, one o the most positive results o

this and earlier surveys has been a genuine appreciation o the benets o the two

sectors working together to create eective inrastructure delivery. Ultimately, it

will take the lasting, consistent commitment o resources rom the public andprivate sectors and improved ways o using those resources to provide the

inrastructure that will enable societies to develop to their ull potential.

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

The Changing Face o Inrastructure: Public sector perspectives  1

Appendix

Lack of funds

Politicization of infrastructure project priorities

Lack of sense of urgency

Corruption or misuse of funds earmarked for infrastructure

Lack of public policy stability

Lack of skills/knowledge/training of officials in this area

Lack of appropriate policies

Inadequate understanding of the severity of the issue

Lack of an effective procurement process

Lack of an appropriate legal/regulatory framework

Lack of legal/regulatory framework stability

Poor creditworthiness of public authorities

Other

Don’t know

None of the above — there are no impediments

0% 20% 40% 60% 80% 100%

56%

33%

21%

18%

18%

18%

18%

18%

17%

11%

9%

8%

3%

<1%

3%

Q1 Which o the ollowing are the greatest public sector impediments to more inrastructure investment in the

country where you are based? (Select up to three)

Q Thinking specifcally about the country within which you are located, what are the greatest barriers to working

eectively with the private sector in inrastructure (e.g., designing, building, fnancing and operating)? (Select up to three)

45%

31%

27%

25%

23%

20%

18%

14%

14%

7%

2%

5%

Differences in culture between publicand private sectors

Public sector obligation to be transparent

Lack of trust

Lack of a sufficiently deep, skilled,competitive private sector market

Inability to sustain commitments made(development stage or contract stage)

Inability to meet contractual commitments

(implementation stage)Unequal balance of power

Confrontational relationships

Absence of an equitable mechanismfor dispute resolution

Other

Don’t know

None of the above — there are no barriers

0% 20% 40% 60% 80% 100%

Due to rounding graph totals may not equal 100 percent

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

1  The Changing Face o Inrastructure: Public sector perspectives

Q In a previous survey, percent o private sector inrastructure providers cited governmental eectiveness as their

biggest concern to the eective delivery o required inrastructure. Thinking specifcally about the country within

which you are located, do you think that these concerns over governmental eectiveness are justifed?

23%

58%

12%

6%

0%

20%

40%

60%

80%

100%

Very justified Somewhat justified Not at all justified Don’t know

Q Thinking specifcally about the country within which you are located, what do you see as the greatest challenge

in spending the available stimulus money eectively? (Select up to three)

50%

32%

31%

31%

28%

23%

22%

13%

5%

1%

3%

1%

Slow approval processes

Excessive regulatory restrictions

Appropriate controls and monitoring

Accountability for expenditure

Transparency on expenditure

Need to allocate funds to‘shovel ready’ projects

Earmarking of funds forspecific projects

Readiness for influx of funds

Other

Don’t know

Not applicable — no stimulus money

Not applicable — no challenges

0% 20% 40% 60% 80% 100%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

The Changing Face o Inrastructure: Public sector perspectives  1

Q Which o the ollowing actors would likely produce the greatest improvement in inrastructure development in the

 jurisdiction or which you work? (Select up to three)

37%

35%

34%

28%

21%

21%

18%

17%

15%

15%

1%

1%

2%

4%

Better training of public sector officials

De-politicize the infrastructure public policy process

Greater use of public-private partnerships

More transparency in project selection

Establishing centres of excellence

More transparency in spending

Greater centralization ofinfrastructure procurement

Better compensation

Secondments between the public and private sectors

Increased ownership of infrastructureby infrastructure funds

Other

Don’t know

Not applicable — no need for improvement

Not applicable — jurisdiction toosmall for these solutions

0% 20% 40% 60% 80% 100%

Q Thinking specifcally about the jurisdiction or which you work, how concerned are you that the ollowing actors will

inhibit your organization’s ability to provide the relevant inrastructure that would support the long-term growth o

the economy in that jurisdiction? (1 = very concerned and = not at all concerned)

1%

1%

1%

1%

1%

1%

1%

1–2

Availability of financing

Economic conditions

Governmental

effectiveness

Political environment

Availability of relevant

skills/ people

Sustainability

considerations

Availability of resources/

raw materials

0% 20% 40% 60% 80% 100%

69% 18% 12%

67% 20% 12%

59% 27% 13%

58% 26% 15%

56% 24% 19%

44% 34% 21%

36% 26% 38%

3 4–5 Don’t know

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

The Changing Face o Inrastructure: Public sector perspectives  1

Q In your view, how eective are the ollowing processes in your organization regarding inrastructure?

(1 = very eective and = not at all eective)

1–2

Project definition

Assessment of needs

Funding approval

Contract managementduring implementation

Contract managementduring operations

Procurement

Project budgeting

Asset management duringoperations

Infrastructure policy definition

Sustaining and demonstratingcommitment

to project implementation

Misuse of funds

0% 20% 40% 60% 80% 100%

53% 29% 15% 3%

3%

2%

4%

4%

4%

6%

2%

2%

2%

2%

50% 30% 17%

50% 29%

49% 31%

48% 32%

47% 33%

47%

45%

45%

43%

39%

32%

37%

35%

36%

20%

16%

16%

18%

19%

15%

17%

18%

25% 31%

3 4–5 Don’t know

Q10 Thinking specifcally about your organization, do you think the private sector can help it to deliver inrastructure

more eectively?

65%

26%

9%

Don’t knowNoYes

0%

20%

40%

60%

80%

100%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

1  The Changing Face o Inrastructure: Public sector perspectives

Q11 Thinking specifcally about your organization, what is preventing it rom delivering inrastructure more eectively?

Lack o: (Select up to three)

50%

38%

27%

27%

23%

22%

19%

18%

11%

5%

3%

Funds

Political will

Sense of urgency

Co-operation with the private sector

Clarity in internal processes

Authority

Experience and expertizeof my staff

Public support

Labour management issues

Other

Nothing is preventing thedelivery of infrastructure

0% 20% 40% 60% 80% 100%

Q1 Thinking specifcally about your organization, what would need to change in order or it to work more closely with

the private sector? (Select up to three)

Availability of funding

Internal attitudes

Increased use of performance-based measures

Procurement processes

Private sector attitudes

Public sector skills

Public opinion

New or revised laws

Private sector risk appetite

Market conditions

More resources tofacilitate transparency

Other

Not interested in workingwith the private sector

Don’t know

0% 20% 40% 60% 80% 100%

33%

27%

25%

24%

24%

24%

22%

19%

18%

16%

16%

3%

1%

1%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

The Changing Face o Inrastructure: Public sector perspectives  1

Q In Which Region Are You Personally Based?

Demographics

32%

30%

30%

3%

3%

2%

North America

Western Europe

Asia-Pacific

Middle East and Africa

Latin America

Eastern Europe

0% 20% 40% 60% 80% 100%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Q In which country are you personally located?

Country Percentage Country Percentage Country Percentage

United States of America 30% South Africa 1% Finland <1%

United Kingdom 17% Hong Kong 1% Guatemala <1%

India 12% Ireland 1% Italy <1%

Austrailia 6% Isle of Man 1% Mexico <1%

Philippines 6% Kenya 1% Moldova <1%

Turkey 4% Netherlands 1% Mongolia <1%

France 3% Nigeria 1% Norway <1%

Canada 3% Switzerland 1% Paraguay <1%

Malaysia 3% Albania <1% Serbia <1%

Pakistan 2% Bahrain <1% Slovakia <1%

Spain 2% Barbados <1% Sweden <1%

Brazil 1% Belgium <1% Tunisia <1%

China 1% Cape Verde <1% Uganda <1%

Germany 1% Czech Republic <1% Ukraine <1%

Japan 1% Denmark <1% United Arab Emirates <1%

Portugal 1% Dominican Republic <1% Zambia <1%

Singapore 1% Falkland Islands <1%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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0  The Changing Face o Inrastructure: Public sector perspectives

© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

Q What is your organization’s average annual operating budget in U.S. dollars?

0%

20%

40%

60%

80%

100%

47%

$500 million or less

26%

$500 million to $1 billion

10%

$1 billion to $2 billion

17%

$2 billion or more

Q What is your organization’s average annual inrastructure budget in U.S. dollars?

0%

20%

40%

60%

80%

100%

55%

17%15%

5%9%

$250 million or less $250 million to

$500 million

$500 million to

$1 billion

$1 billion to

$2 billion

$2 billion or more

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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The Changing Face o Inrastructure: Public sector perspectives  1

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

Q At which level o government does your organization operate?

0%

20%

40%

60%

80%

100%

37%

28%

35%

City/local State/regional Federal/national

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Q Which o the ollowing best describes your title?

0%

20%

40%

60%

80%

100%

26%23%

17%15%

5% 4%

11%

Manager or

equivalent

Senior manager

or equivalent

Project officer

equivalent

Director or equivalent Finance director

or equivalent

Head of agency/

ministry or equivalent

Other

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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  The Changing Face o Inrastructure: Public sector perspectives

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

Q What is your main unctional role?

7%

1%

1%

2%

2%

3%

5%

5%

9%

9%

11%

15%

16%

16%Finance

General management

Operations/administration

Procurement

Strategy and planning

IT

Research and Development

Public affairs

Information and research

Legal

Human resources

Constituent service

Risk

Other

0% 20% 40% 60% 80% 100%

Yes

47%

53%

No

0%

20%

40%

60%

80%

100%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Q Are you or have you been directly involved in approving, applying or or using inrastructure stimulus unds?

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The Changing Face o Inrastructure: Public sector perspectives 

© 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member rms o the KPMG network o independent rms are aliated with KPMG International.KPMG International provides no client services. No member rm has any authority to obligate or bind KPMG International or any other member rm vis-à-vis third parties,

nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

Q Which o the ollowing best describes your organization?

88%

6%

6%

0%

0%

0%

0%

Public sector

Multiregional and/or multilateral agency

Quango (quasi-autonomous non-governmentalorganization) or NDPB (non-departmental public body)

NGO (non-governmental organization)

Private sector

Other

Don’t know

0% 20% 40% 60% 80% 100%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

Q Are you an elected ofcial?

Yes

0%

100%

No

0%

20%

40%

60%

80%

100%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

  The Changing Face o Inrastructure: Public sector perspectives

Q Are you involved in inrastructure policy, procurement or development?

Yes

0%

100%

No

0%

20%

40%

60%

80%

100%

Source: The Changing Face of Infrastructure: Public sector perspectives, KPMG International, 2010 

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nor does KPMG International have any such authority to obligate or bind any member rm. All rights reserved

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