In terms of Public-Private Partnership arrangements the incentive for private sector participation typically has to do with an appropriately weighted risk for return model.
However not all social services and Infrastructure that are termed critical present ample return as a basis for partnership e.g affordable housing, roads, power, and water within low-income countries and populations.
Dear Abel Owotemu
These links might help, have a look:
1. https://www.gihub.org/resources/financial-facilities/viability-gap-fund/
2. https://inclusiveinfra.gihub.org/action-areas/affordability-and-optimising-finance/
3. https://www.researchgate.net/post/What-is-the-extent-of-the-Public-and-private-sector-partnerships-to-attracting-domestic-and-foreign-investment
Best Regards
Dr. Fatemeh Khozaei
Dear Abel Owotemu
These might be helpful:
Presentation Smart City Financing Mechanisms: Pool Bond Financing|Pool Le...
Research Alternate Finance for Infrastructure Development
Additionally, the government can come up with ideas such as Social Sector VGF to support the PPP projects. In this way alternate finance could be raised for projects related to slum revelopment, wash facility, hospital construction etc.
Since the project development cost of infrastructure projects are high, Infrastructure Project Development Fund could be started by government for providing project formulation costs of PPP and other infrastructure project.
An Institutional Framework needs to be created to provide and support increasing role of VGF and PPP. This could be a three tier institution:
- Empowered Committee on Infrastructure Development (Approving Committee)
- PPP Cell (Nodal Agency)
- Respective Administrative Departments (Implementing Agencies)
The framework will help in identification, development and execution of project under PPP modality. It can help in setting terms and conditions under which funding could be provided and in resolution of inter departmental issues.
Thanks and Regards
Kisslay Anand
In the United States, the property tax actually impedes the economic viability of both affordable housing & infrastructure.
Re affordable housing, the property tax is applied to improvements. Although the typical rate is only 1% to 2%, it is levied not only when an improvement is made, but each and every year thereafter that the improvement adds value to a property. Thus, during low inflation, the economic impact can be like a sales tax of 10% to 20% on construction labor and materials. That's a huge detriment to affordability. It also pushes the payback period for energy conservation improvements further into the future.
Re infrastructure, it is created to facilitate development. But, if infrastructure is well-designed and well-constructed, it increases the price of nearby land. This pushes development (particularly affordable development) away to cheaper, but more remote sites. Governments extend infrastructure to these remote sites only to have the cycle repeat. This is part of the dynamic behind urban sprawl that is bad for the environment and bad for taxpayers due to the wasteful duplication of expensive infrastructure.
Fortunately, some communities have remedied this situation by reducing the tax rate applied to applied to privately-created building values while increasing the tax rate applied to publicly-created land values. The lower rate on building values makes them cheaper to construct, improve and maintain. Surprisingly, the higher rate on land values (by reducing the profit from land speculation) helps keep land prices more affordable. Thus, without new spending or lost revenue, this tax shift can make both buildings and land more affordable. As a bonus, this reform motivates the development of high-value sites -- which are typically infill sites near existing infrastructure -- thereby reducing sprawl.
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