The Economic and Social Council for Asia and Pacific (ECAP) organized the Third Asia-Pacific Ministerial Conference on Public-Private Partnerships for Infrastructure Development in Asia and the Pacific in Tehran, the capital of the Islamic republic of Iran on 14 November 2012. The final declaration adopted at the conference, also known as Tehran Declaration, while reaffirming the pivotal role of economic and social infrastructure, including but not merely limited to transit and transport facilities and services, also laid emphasis on water, wastewater treatment, solid waste management, drainage system, energy and power supply, Information and Communication Technologies (ICTs), education, health, welfare, tourism and recreational facilities in achieving sustainable development, disaster risk reduction in supporting development and achieving the Millennium Development Goals.
It recognized that insufficient and unsustainable infrastructure and related services have strong adverse effects on economic growth which could prevent the countries efforts to realize their full development potential in the region. Accordingly it emphasized that, typically, infrastructure development requirements were significantly larger than budget provisionsand public finance and that innovative solutions were needed in order to find adequate financial resources for the development of infrastructure, improve the efficiency of infrastructure operations and create incentives to promote the maintenance of infrastructure through appropriate policies and coordinated actions in the region,
It further reiterated the importance of cooperation among the public and private sectors to bridge the gap between the required financial resources for infrastructure projects and the availability of finance through their partnership, within and among the nations in the region. It notedthe valueof the creation of specific financial arrangements for infrastructure development which would help to promote investment in infrastructure by the private sector in the region,
It alluded to the outcome document, “The future we want”, of the United Nations Conference on Sustainable Development held in Rio De Janeiro, Brazil, from 20 to 22 June 2012, which recognized the active participation of the private sector in contributing to the achievement of sustainable development, including through the important tool of public-private partnerships,
While taking note of the fact thatpublic private partnerships are a key strategy for building sustainable infrastructure and delivering related services, especially in the context of the global economic downturn, which threatens to reverse the development gains made by countries in the Asia and Pacific region; the Tehran Declaration recognized that the sustainability of public-private partnerships is being undermined by a number of constraints in business environment, legislative, regulatory framework, institutional arrangements, financing, human resources and implementation process,
There emerged agreement amongst the member countriesonthe important role of public-private partnerships for the development of physical infrastructure in economic and social development, particularly transport infrastructure including Asian Highway, Trans-Asian Railway and dry ports and international transit corridors in the ESCAP region and connecting with other regions, such as the ESCWA and ECE regions;
Asserting that the effective use of the cooperatives and non-profit organizations capacities in public-private partnership is one of the complementary factors in enhancing the development and provision of infrastructure facilities and services in the region, it invite countries of the Asia-Pacific region, as appropriate, to consider the sustainability of their public-private partnerships by reviewing and assessing their:
- Public-private partnership advocacy initiatives;
- Opportunities to engage the private sector in infrastructure provision that supports sustainable development;
- Public-private partnership strategies, policy frameworks and action plans for infrastructure development, as well as legislative, regulatory and institutional arrangements for public-private partnerships at the general and sectoral levels in order to identify any barriers to their effectiveness;
- Financial instruments and capacity to meet long-term equity and debt needs of infrastructure projects;
- Portfolio of bankable and sustainable infrastructure projects which could be offered to the private sector for financing;
- Capacity for risk management in both public and private sectors and its impact on public-private partnership projects,
It called upon the United Nations bodies and specialized agencies, the relevant offices of the United Nations secretariat, international and regional financial institutions, bilateral donors and other organizations:
- to assist countries of the Asia-Pacific region in meeting infrastructure development challenges through: (i) regional and interregional cooperation in the development of public-private partnerships; (ii) the organization of meetings and regional networking arrangements aimed at promoting the exchange of experiences and information; particularly on disaster risk reduction and water resource management; (iii) promoting the use of ICT-based products, networks, services and applications, and to help countries overcome the digital divide as stipulated in World Summit on the Information Society Plan of Action of December 2003; (iv) to mainstream ICTs in their work programmes and to assist all levels of developing countries, to be involved in the preparation and implementation of national action plans to support the fulfillment of the goals indicated in the World Summit on the Information Society Declaration of Principles and the World Summit on the Information Society Plan of Action of December 2003, taking into account the importance of regional initiatives;
- to assist countries of the Asia-Pacific region in conducting an applied study on the positive and negative impact of taxes on public-private partnership infrastructure investment projects in the region and in launching a process for establishing a working group comprising of interested Asia and Pacific countries to devise Islamic financial instruments for financing public-private partnership projects;
- to assist countries of the Asia-Pacific region, on a mutually agreed basis, in their capacity-building programs, including public-private partnership policy framework formulation, legislative and regulatory reform and the administrative arrangements for public-private partnerships;
- to work collectively to establish an Asia Pacific network of public-private partnership units and programmes which would, amongst other matters, provide ad hoc advisory and training services, disseminate information on public-private partnerships and coordinate regional meetings of national public-private partnership units and programmes with the aim of developing public-private partnership programmes that contribute to sustainable development;
- to provide technical assistance, upon request, to help increase the public-private partnership readiness of countries of the Asia-Pacific region, giving special emphasis on least developed countries (LDCs), Landlocked Developing Countries (LLDCs), and Small Island Developing States (SIDS), including but not limited to: (i) preparing regional financing and risk management tools to reduce transaction cost; and (ii) developing risk mitigation mechanisms against exchange rate misalignment, environmental adverse impact, and natural disasters;
- to encourage financial and monetary institutions as well as international development banks to invest on public-private partnership bankable projects, especially in the transport, energy, water resources, Information and Communication Technologies (ICTs) sectors;
- to explore ways to facilitate cooperation among countries of the Asia-Pacific region on public-private partnership projects in their effort towards: (i) streamlining financial flows and motivating investment especially through attracting foreign direct investment to public-private partnership projects; (ii) setting up forums to invite private sectors of different countries to cooperate in public-private partnership projects; and (iii) encouraging and inviting countries of the Asia-Pacific region to consider setting up an Asian investment bank;
- to expand their supporting activities on public-private partnerships through cooperation with all regional arrangements and organizations,
