Public infrastructure development

BRUNEI needs to think beyond government financing to meet all of the Sultanate's infrastructure needs and at the same time ensure efficiency, a leading economic development expert said.

"Because we have so many infrastructure requirements in the coming years, I think it would be useful for us to think beyond just government financing," Dato Paduka Timothy Ong, acting chairman of the Brunei Economic Development Board (BEDB), said at the sidelines of a recent forum on financing infrastructure projects.

While Brunei has strong fiscal health, the government would also appreciate and encourage such financing options as it would help reduce the burden on government cash flow, said Dato Paduka Ong.

Non-government financing, he explained, can also lead to greater efficiency as sources of revenue and maintenance costs must be considered.

"In Brunei, insufficient thought is given to some of our projects. It is quite easy to use money to build a large building but who is going to maintain it next year? When you are forced to think, in advance, of the income needed to cover costs, then this will generally lead to greater cost discipline and efficiency," he said.

Many governments over the years have already resorted to private financing for public infrastructure development, putting government funding supplementary, Dato Paduka Ong noted.

"In Brunei, up until now, infrastructure has been financed almost exclusively by the government," he told The Brunei Times on the sidelines of the "Financing of Infrastructure Projects: Regional Developments and their Relevance to Brunei Darussalam" workshop at the iCentre in Anggerek Desa, Jalan Berakas recently.

The acting chairman explained that the topic of alternate financing for such projects such as public-private partnerships (PPP) is particularly relevant to Brunei as the country is currently embarking on a number of both economic and social infrastructure projects as reflected in the National Development Plan economic blueprint.

"In the next few years, more houses will need to be built for the people of this country. There will be a port, bridges, highways, maybe a new hospital, enhancement to current airports and so on," he said.

The workshop, co-organised by BEDB and Standard Chartered Bank Brunei, looked at means of financing large-scale public infrastructure projects.

During the infrastructure forum, Desmond Lim, BEDB assistant chief executive and head of the board's Public-Private Partnerships unit, said aside from financing, foreign investors also bring in expertise, technology and marketing contacts, which are valuable assets to the Sultanate.

"Alternative financing or PPP is not only about bringing in financial resources ... If anything, it brings in the expertise required to run some of these projects," he said. "For example, if the private sector is in a position that can run or deliver a particular service or product at a rate that is more efficient than what the public sector can offer, then why shouldn't we participate in (such partnerships)."

The Brunei Times