INSIGHT the Global Infrastructure Magazine | Issue No
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INSIGHT The global infrastructure magazine | Issue No. 9 | 2017 Globalization Leading in a Global operators Investors ponder disrupted world in an era of new markets A roundtable with uncertainty A roundtable with Anahita Arora, A roundtable with Thierry Déau, Khalid Koser and Javier Pérez Enrique Fuentes Lord Hastings Fortea and and Ana Corvalán Page 12 Satoru Tamiya Page 24 Page 18 #globalinfra Foreword nfrastructure is firmly at the top of approaches to infrastructure delivery have will choose to redouble their integration government agendas. It’s the lynchpin been disrupted. And this is creating massive into the global marketplace recognizing that, Iof political platforms; the hope for opportunities for some, but also significant while there will be short-term pains, the sluggish economies; the unifier of regional risks for many. long-term gains will be immense. diversity; the solution to climate change; an This is a pivotal point for most markets In this edition of Insight magazine, we have instrument for social change. For a host of and societies; many of the decisions made sought to highlight both the good and the bad economic, social and political reasons, all today will reverberate for generations. The of globalization. We hope to inspire some governments — at all levels — are keenly great fear is that some markets may look leaders to emulate the good and catalyze focused on infrastructure. at all this disruption and choose to retreat others to stamp out the bad. Moreover, The problem is that — over the past few inwards — to vainly try to protect their frail we hope to clearly articulate the real and years in particular — the rules of the game advantages with barriers and subsidies. fundamental benefits that globalization can have changed. As this edition of Insight The great hope is that governments bring in this new world order and at the same magazine clearly illustrates, the traditional (strongly supported by their populations) time highlight some of the risks. © 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. James Stewart Stephen Beatty Julian Vella KPMG’s Global America’s region and Indian Asia Pacific region Infrastructure Chairman Head of KPMG’s Global Head of KPMG’s Global E: [email protected] Infrastructure practice Infrastructure practice @jaghstewart E: [email protected] E: [email protected] @stephencbeatty @jp_vella We also recognize that ideas often require edition of Insight magazine contains our offers not only solid ideas, but also a concrete examples. So, for this edition of view of the key trends that will influence firm foundation for future globalization Insight magazine, we identified projects infrastructure markets in 2017 (don’t be and growth. in our past Infrastructure 100 reports that surprised to see globalization on the list). To explore any of the themes identified in illustrate some of the big themes carried It also contains an interesting discussion this publication — or to discuss your own through this edition of our magazine. This on the link between data, sustainable unique infrastructure challenges — we review offers not only inspirational examples, development and globalization. encourage you to contact your local KPMG but also deep insight into the opportunities On behalf of KPMG’s global network member firm or any of the authors who being created in this disrupted environment. of infrastructure professionals, we would contributed to this magazine. While globalization is certainly front like to thank all those who contributed and center in this publication, we have to this edition of Insight magazine. We also included articles that are closely hope that — in this world of continuous related to the topic. For example, this disruption and uncertainty — this edition © 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. Contents 06 The yin and yang of globalization By Stephen Beatty, America’s region and Indian Head of KPMG’s Global Infrastructure practice Up Front: 12 08 Infrastructure for everyone: Unblock the pipelines By Julian Vella, Asia Pacific Leading in a disrupted world region Head of KPMG’s Global Globalization: A roundtable interview with Infrastructure practice Anahita Arora, Eurasia Group, Khalid Koser, World Economic 10 Empire lost: Why Forum’s Global Future Council protectionism doesn’t lead to on Migration, and Lord Michael better infrastructure Hastings, KPMG’s Global Head By James Stewart, KPMG’s of Corporate Citizenship Global Infrastructure Chairman 30 Not welcome here: The rising threat of protectionism By Qing Lin Fang, KPMG in the UK 32 Data, sustainable development and decision making A roundtable interview with Stefan Schweinfest, UN Department of Economic and Social Affairs — Statistics Division, and Davinder Sandhu, KPMG in India 44 Putting stakeholders and communications at the heart of major infrastructure An interview with Gary Sargent, CJ Associates, and Richard Boele, KPMG’s Global Head of 48 Human Rights and Social Impact Spotlight: Services Infrastructure 100: Looking 46 Listening in: Infrastructure back to see ahead in a protectionist world By John Kjorstad, KPMG in the By Pranya Yamin, KPMG UK, and Dane Wolfe, KPMG International International © 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 14 Going global: Lessons from solar 22 Taking Indonesia to market: An interview with Jonathan Maxwell, Leveraging global experience Sustainable Development Capital LLP An interview with Sinthya Roesly, Indonesian Infrastructure Guarantee Fund 16 Securing the benefits of globalization: Asia’s dilemma 24 To OECD or not to OECD? Investors By Julian Vella, Asia Pacific region Head of ponder new markets KPMG’s Global Infrastructure practice A roundtable interview with Thierry Déau, Meridiam, Enrique Fuentes, StepStone 18 Opening up: Global operators in an Group, and Ana Corvalán, Eaglestone era of uncertainty A roundtable interview with Javier Pérez 28 Incentivizing investment Fortea, Globalvia, and Satoru Tamiya, By Fernando Faria, KPMG in Brazil Mitsubishi Corp 20 No going back: Disruptive trends reshaping the utilities sector By Simon Virley, KPMG in the UK 38 Global infrastructure in a local market By John Kjorstad, KPMG in the UK 40 Inspiring investment in Indonesia: 34 A roundtable discussion A roundtable interview with Harold Stepping into bigger shoes: The Tjiptadjaja, Indonesia Infrastructure changing role of multilateral banks Finance, Rainier Haryanto, Committee By James Stewart, KPMG’s Global for Acceleration of Priority Infrastructure Infrastructure Chairman, with Projects, and Pradana Murti, PT Sarana contributions from Chris Heathcote, Global Multi Infrastruktur Infrastructure Hub, Laurence Carter, World Bank Group, Eliane Lustosa, BNDES, and Matthew Jordan-Tank, European Bank for Reconstruction and Development 50 A new world order 60 Rethinking infrastructure By James Woodward, Head of KPMG’s project selection: Breaking Africa Infrastructure Hub the cycle of new construction By Paul Foxlee, KPMG in Australia, and 54 Innovative approaches to unblock Stan Stavros, projects KPMG in Australia By Richard Threlfall, KPMG’s Global Head of Public Transport 62 Emerging trends in 2017 Other news 56 Business not as usual By Andy Garbutt, By Stephen Prendiville, KPMG in Canada KPMG in the US, and Anish De, KPMG in India 58 Adapting to culture and customs By Richard Paton, KPMG in the UAE 66 Around the world in infrastructure © 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. The yin and yang of globalization 06 | INSIGHT | #globalinfra © 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. Up front s a new world order takes shape, So, there is a yin and a yang to the debate over the merits of globalization. It allows for simultaneous Aglobalization are raging. Let’s access to technology which is wonderful hope sensible heads prevail. for emerging markets but a massive risk The debate over globalization is for the mature markets as competition not new. Yet until recently, the battle increases. It opens up global trade and lines were fairly clearly drawn. On investment, unlocking productivity the pro-globalization side stood the in low-cost markets but eroding Stephen Beatty ‘establishment’ — governments, job prospects in high-cost ones. It Americas region and Indian Head of businesses and institutions that reduces consumer costs and improves KPMG’s Global Infrastructure practice understood the macro benefits that standards — something the developing E: [email protected] globalization could unlock. On the anti- world dearly needs — but it also reduces @stephencbeatty globalization side stood a mish-mash of profit margins and commoditizes anti-establishment groups — Occupy products. Some see disruption where Wall Street protesters, authoritarian others see opportunity. Some see fiscal states,