We are constantly bombarded with headlines about how we are living in an era of transformation, of increased competition and rapid technological development. These, it is claimed, will allow our societies to become richer and more resilient.
However, as the conversation continues about digital services, transport and the energy transition, it is clear that more investment in infrastructure is needed. Yet, looking around the globe, many countries are still largely dependent on 19th and early 20th-century infrastructure to provide their water, energy and transport.
It is apparent that there is an elephant in the room: finance. In several countries, up-front costs hinder government ambitions and ministries often lack experience in project or resource management – something that has been seen in several high-speed rail or energy pipeline projects.
Other countries have become frustrated by the experience of short-term international projects, which fund infrastructure but not ongoing operations, or introduce solutions that are unsuited to local conditions. For countries that attract significant amounts of capacity-building support, such as Jordan, these shortcomings are particularly exasperating.
Then there are public services that have experienced a decline in standards after they were contracted to profit-hungry industry partners.
Given all this, it would be easy to think that transforming societies to have better and socially valuable public services might not be achievable within our lifetime. But is the tide turning?
Gulf countries traditionally generate substantial oil revenues and low national budget deficits – factors that have allowed for a greater level of public investment in infrastructure than that seen in many other countries. Yet key among them have recognised the potential for efficient public-private partnerships to overcome traditional barriers, incentivise higher performance and obtain net value gain – if approached correctly.
The boundaries of public-private partnerships, or PPPs, are being redefined. The Middle East and North Africa region has been at the forefront of navigating how to successfully orchestrate one-off projects that read from the same sheet music to deliver a national vision that works for their populations. These successes are already shaping global trends.
Saudi Arabia’s Privatisation Programme, part of the country’s Vision 2030 strategy, is intended to unlock value in state assets, increase revenue from non-oil products and improve public services with private-sector efficiency. Improved quality of public life is a key driver, and this approach is helping to accelerate major projects that might otherwise be unaffordable, such as water infrastructure, desalination plants and high-speed rail projects.
Historically, the use of PPPs in the region has been selective. More and more countries in the region like the UAE are now passing and adapting PPP laws and frameworks.
Qatar, too, is not driven by a need to plug public finances but rather a desire to exploit what is seen as a win-win mechanism to attract investment and use the right aspects of external expertise as leverage to achieve net gains for governments and citizens, such as reduced costs or more efficient or timely services. Doha is starting to move from a time of establishing rules and pilot studies, into another defined by planned, dynamic growth across many sectors.
The successes of the GCC countries are likely to ripple across the wider region, providing a blueprint for how PPPs can produce the type of outcomes that the public know are possible. This is not just a shift in contracting trends – it is a cultural change that could future-proof public developments by providing a narrative that is resistant to changes in political or global trends. By framing such developments in terms of practical and economic efficiency, they become less vulnerable to destabilisation and redirection, and could help to capture popular support, something that could enable long-term change.
The nature of PPP models also encourages governments to consider the whole lifespan of a piece of infrastructure. In some cases, like Jordan’s Aqaba-Amman Water Desalination and Conveyance Project, a private contractor will ultimately transfer operations to the public sector once it is up and running. Such relationships allow the private sector to play to their strengths of efficient delivery and innovation, while allowing the government to focus on achieving benefits for all.
We are seeing particularly great strides in nations that have national infrastructure-project pipelines. These forward-looking plans identify current and future infrastructure needs, with timescales that extend beyond typical short-term project or political cycles. Saudi Arabia’s Vision 2030 is a particularly prominent example. Although this approach has been gaining traction in Mena countries for a number of years, western countries such as the UK are now following suit, with its government having introduced a national infrastructure pipeline in July.
For developing Middle East and North Africa countries, this raises a question about the type of international support that might be required going forward. Boosting such countries’ capacity to develop and support nationally determined project pipelines may enable more long-term, population-centric results, interrupting the pattern of one-off, often isolated projects that people in a number of countries have become accustomed to.
Although this might seem like another form of bureaucracy, or another rewriting of the same script, it is an approach that is delivering results for ordinary people. From the Riyadh Metro to the Dubai solar parks, from Al Wakrah and Al Wukair Sewage Treatment Plant in Qatar to Egypt’s Benban Solar Park project, sustainable and efficient PPP projects are delivering major upgrades for citizens.
The world continues to look for global leaders who can help to cohere the roadmap to transformation. Today, historians talk about the role of Victorian England in the development of international infrastructure, or poor historical planning decisions made during the early decades of several countries established in the 20th century, and see how they shape the ability to transform today.
Might tomorrow’s historians write about the coming years as a modern golden era for development? After decades of what has felt like an era of investment for the benefit of everyone but the average citizen, we can only hope that our near future is defined by a period of public and private success.
