The infrastructure sector in India and Indonesia — where at least $500 billion worth of projects are expected to be up for tender over the next 10 years — may soon receive bids from Japan and Australia.
Japan and Australia have long been partners on resources and agriculture, but not on infrastructure. The two countries established its infrastructure planning committee only in December of 2009.
Australia Japan Business Cooperation Committee Vice-President Bob Seidler said both sides wanted to enter the infrastructure sector for a variety of reasons, including broadening their relationship into the services sector, The Australian reports.
“The best way to try to get a whole lot of things going in different industries is infrastructure, because it brings together different sectors of the economy,” Seidler said.
Japan can learn a lot about private sector funding from Australia, which has an extensive experience in public-private partnerships. In fact, the Japan Australia Business Cooperation Committee — the equivalent of Australia’s working group — also wants to introduce Australian-style PPPs in Japan.
At present, groups composed of Japanese and Australian companies are already working on a structure to promote PPPs in India and Indonesia. Leighton Holdings, Macquarie Group, AMP, ANZ, KPMG and PwC are already in talks to promote the partnership in both countries. Further, Seidler said the Indian government has signaled it had a five-year plan to spend $1 trillion on infrastructure — half to be financed by the private sector.
Japan is eyeing infrastructure projects in India and Indonesia to combat the rise of China, which replaced the country as the world’s second-largest economy.
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