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26 Oct 2018 Updated 26 Oct 2018

Infrastructure Asia’s by-the-book tack sets S’pore’s role as trusty facilitator

The Business Times

Newly-launched government-led organisation Infrastructure Asia seems to represent a particularly Singaporean approach towards the region’s vast infrastructure potential: keen interest, backed by prudence and best practices. Such caution, while not as infectious as enthusiasm, is valuable in an uncertain climate.

Set up by Enterprise Singapore (ESG) and the Monetary Authority of Singapore, Infrastructure Asia aims to connect local and international firms in the infrastructure ecosystem to government officials in the region, for the development, financing and execution of infrastructure projects. Its establishment is a clear response to the undeniably vast demand present in Asia. The Asian Development Bank, for one, estimates that developing Asia’s infrastructure needs will reach US$26 trillion from 2016 to 2030.

Singapore, never one for unbridled zeal, has approached this heady opportunity with a focus on getting it right. In his speech at Tuesday’s launch, Minister for Finance Heng Swee Keat focused on two main areas: making new infrastructure future-proof by way of being smart, green and sustainable, and attracting private capital by ensuring projects are bankable, investible and visible.

The proposals for making projects more bankable and investible may seem to be common sense, including standardised and proper documentation of project details, and proper planning and structuring of projects. Yet the very fact that these are being emphasised points to Asia’s great demand not just for infrastructure projects, but for a structured, disciplined, by-the-book approach – the sort of modus operandi, in short, that Singapore is known for.

As Asia’s infrastructure push rolls on, Singapore stands to make a name for itself as a trustworthy facilitator.

The Singapore Infrastructure Dispute-Management Protocol, also launched on Tuesday, is part of this. Aiming to minimise the risks of time and cost overruns from disputes, the protocol will have parties engage a Dispute Board of neutral professionals from the start, rather than only when a dispute arises. It taps Singapore’s position as an international dispute resolution hub, with the Singapore International Mediation Centre and Singapore Meditation Centre providing support and helping to identify and appoint such professionals.

Looming in the background of any discussion on Asia’s infrastructure boom is China’s Belt and Road Initiative (BRI). Scepticism about the BRI has been in vogue, with Malaysia’s high-profile cancellations and halting of projects coming amid cautionary tales about abandoned white pachyderms and governments struggling to repay debts.

On Thursday, the first Singapore-China BRI Investment Forum was held by the Ministry of Trade and Industry, ESG and China’s National Development and Reform Commission. Minister for Trade and Industry Chan Chun Sing’s speech included a mention of media concerns, but also identified familiar principles – such as evaluating projects thoroughly according to market principles – and highlighted Singapore’s potential role, including offering its expertise in financing and legal advisory services.

As media coverage feeds the narrative of uncertainty and risk over the BRI, a cloud of doubt may rise over the broader picture of Asia’s infrastructure landscape. Moves such as the new protocol provide welcome assurance to parties who might have had cold feet. In this atmosphere of caution, Infrastructure Asia – acting as a platform and facilitator – can benefit from being seen as an honest broker of trustworthy deals, as can Singapore more broadly.

Source: The Business Times © Singapore Press Holdings Limited. Reproduced with permission.