Cross-border Infrastructure Projects Research Articles

Deciphering the difference puzzle of risk-sharing: A comparative analysis of infrastructure PPP development within China and US

Appropriate risk sharing is crucial for the successful implementation of Public-Private Partnership projects. However, under different social systems, the international community lacks a clear risk-sharing framework in Public-Private Partnership research. This study employs a multi-case study method to examine the practice of risk sharing in infrastructure Public-Private Partnership projects within China and the US, aiming to provide a clear risk management framework for Public-Private Partnership projects. The research findings reveal common elements and similar characteristics in risk-sharing practices. Contrary to the goal of transferring all risks to the private sector, both countries actually allocate risks to the party with stronger risk control capabilities or share risks between the government and the private sector. The US benefits from more mature policies and has a comprehensive Public-Private Partnership model implementation framework; in contrast, as an emerging market for Public-Private Partnership models, China's current laws and regulations need further improvement. The results of this study not only contribute to optimizing risk-sharing arrangements and improving investment efficiency of the project, but also promote the development of cross-border infrastructure projects, and provide valuable experience and insights for the sustainable development of global infrastructure.

Моделирование перерабатывающей способности терминально-логистических объектов железнодорожного пограничного перехода Нижнеленинское (РФ) – Тунцзян (КНР)

The workload of terminal and warehouse facilities of the transport and logistics center «Nizhneleninskoye» under construction, accompanying the railway bridge crossing Nizhneleninskoye (RF) - Tongjiang (PRC), is investigated. The transport and terminal logistics infrastructure of the Nizhneleninskoye - Tongjiang border crossing is considered. The paper uses theoretical research methods, including modeling, visualization and comparison. Crossborder infrastructure projects, including railway and automobile bridge crossings, are considered, indicating the existing and prospective capacity. The technical and operational characteristics of the transport and terminal logistics infrastructure of the Nizhneleninskoye - Tongjiang railway border crossing are given. The technical and technological parameters of the warehouse complex of the transport and logistics center Nizhneleninskoe are described. The results of two modeling scenarios are presented - at the first stage of operation of the transport and logistics center «Nizhneleninskoe» and at the second stage of operation with infrastructure development for prospective cargo handling. With the increase in the incoming cargo flow by 2.5 times at the second stage of operation of the warehouse complex, during the simulation, the load of the storage area of the warehouse complex increased by 40%, the load of lifting and transport equipment increased, which affected the reduction in the number of handled and shipped loaded vehicles. In order to speed up intra-warehouse operations, it is proposed to develop options for moving lifting and transport equipment, designate «hot» and «cold» zones of the warehouse, determine the required staff numbers with distribution by working positions, draw up technological maps and daily work schedules of the warehouse.

Assessing the Nexus between Cross-border Infrastructure Projects and Extinction Accounting—from the Belt and Road Initiative Perspective

ABSTRACT The Belt and Road Initiative (BRI) is a mega-global infrastructure development strategy initiated in 2013. Although the BRI has fostered huge potential for economic growth, it poses a significant threat to biodiversity, especially because many of the infrastructure projects are cross-border and are being built in areas where rare and endangered species found nowhere else on the planet live. This paper reflects and raises concerns about the repercussions of BRI infrastructure projects on species extinction. While most research has been geared towards assessing the economic and social impacts of BRI on host countries, this paper contributes to the sustainable planning and evaluation of the impacts of a less investigated sector—the infrastructure sector through the lens of extinction accounting. By identifying the specific extinction risks of different types of infrastructure projects during construction-in-progress period and daily operations period, this paper refines and extends prior general frameworks of extinction accounting, and further tailors them to the specific and important context of infrastructure projects under the BRI scenario. In addition, this paper serves as a counterpoint to prior literature on extinction accounting within the Chinese frame of reference by critically underscoring the current infirmity in extinction accounting by Chinese MNEs operating under the mega initiative. Thirty representative cross-border infrastructure projects under the BRI are examined on how they report and attempt to mitigate their ecology-specific impacts using the extinction accounting checklist. This paper concludes that the extinction accounting practices of BRI infrastructure projects are still at their embryonic stage and offers practitioners, researchers and policy makers critical insights and a broader perspective on the role of human activities in extinction crises along cross-border corridors.

Effects of a Threat and Alliance on International Cooperation: Comparison of Inter-Korean and Turkish-Armenian Railway Projects

The article examines restricting factors in international cooperation, drawing a comparative analysis of two cases on cross-border infrastructure projects: the Gyeongui railway line that connects North and South Korea and the Kars-Gyumri-Tbilisi railway line that links Turkey and Armenia. In both cases, states involved strive for the normalization of diplomatic relations and border openness as well as potential economic opportunities and national security. Nevertheless, neither Seoul and Pyongyang nor Ankara and Yerevan succeeded in building a sustainable cooperation framework. While the outcome is the same, independent variables in both cases are different. Firstly, two Koreas have been in a military confrontation for seven decades, whereas Turkey and Armenia never engaged in a direct conflict. Secondly, the configuration of alliances (South Korea and the United States and Turkey and Azerbaijan) weakens the decision-making on the troublesome infrastructure projects. Consequently, alliances are identified as one the key factors that determine the mode of international cooperation.

Governance distance and the performance of cross-border private participation infrastructure projects

PurposeThe privatization of infrastructure promotes efficiency and service standards. While cross-border private participation infrastructure (PPI) projects hosted in emerging markets have become more prevalent in recent years, there have also been more failures. The purpose of this paper is to investigate how governance distance affects the survival of cross-border PPI projects.Design/methodology/approachThe authors provide theoretical justification and empirical evidence to verify our views. The authors test the hypotheses on a sample of 4,678 cross-border PPI project investments made in emerging market countries between 1990 and 2016. Estimation techniques consist of a binary logistic regression model and a rare events logistic model.FindingsThe findings suggest that increased governance distance can lead to project failure. The study results show that governance distance is negatively correlated with the probability of project survival. Greenfield investment intensifies the negative effect of governance distance while competitive contracts mitigate the negative effect of governance distance.Practical implicationsThe results reveal that transnational investment in infrastructure projects is susceptible to institutional differences between home and host countries. Therefore, both private enterprises and host government should pay attention to the impact of inter-country differences on negotiations and project operation. Competitive contracts mitigate this negative effect, but entering in the form of greenfield investment amplifies the negative effect of distance.Originality/valueTransnational industrial engineering projects are easily affected by the differences in governance levels between the two countries. This study introduces governance distance into the field of infrastructure projects, focusing on the impact of differences between home and host countries on transnational projects. The findings on infrastructure projects that are closely related to host government contribute to the literature by broadening the research of institution and distance.

Attracting private financing in cross-border infrastructure investments

Cross-border infrastructure projects offer significant economic and social benefits for the Asia-Pacific region. If the required investment of $8 trillion in pan-Asian connectivity was made in the region’s infrastructure during 2010–2020, the total net income gains for developing Asia could reach about $12.98 trillion (in 2008 US dollars) during 2010–2020 and beyond, of which more than $4.43 trillion would be gained during 2010–2020 and nearly $8.55 trillion after 2020. Indeed, infrastructure connectivity helps improve regional productivity and competitiveness by facilitating the movement of goods, services and human resources, producing economies of scale, promoting trade and foreign direct investments, creating new business opportunities, stimulating inclusive industrialization and narrowing development gaps between communities, countries or sub-regions. Unfortunately, due to limited financing, progress in the development of cross-border infrastructure in the region is low.This paper examines the key challenges faced in financing cross-border projects and discusses the roles that different stakeholders—national governments, state-owned enterprises, private sector, regional entities, development financing institutions (DFIs), affected people and civil society organizations—can play in facilitating the development of cross-border infrastructure in the region. In particular, this paper highlights the major risks that deter private sector investments and FDIs and provides recommendations to address these risks.

Dissimilarities between the national cost/benefit models of road projects: Comparing appraisals in Nordic countries

The Nordic Council has a vision to create the most integrated region globally by 2030. Nevertheless, Nordic cross-border infrastructure projects are generally developed by each nation individually. Joint Nordic infrastructure planning is thus fragmented. An example of this, as reported herein, is how road projects are assessed by the infrastructure planning authorities in Norway, Sweden, and Finland, the latter to which is included in the comparison for the first time. In each country, cost/benefit analyses (CBAs) are used. In each nation, the monetary values of changes in travel time, accidents, and environmental externalities are estimated. We then apply those values to the three national CBA models to assess an illustrative hypothetical road project. Theoretically, the models should provide similar outcomes when using a common set of parameters. Instead, we show that the choice of national model is crucial to the outcome. The Swedish model, for example, generates a higher cost of travel time than the other models irrespective of the nation from which we choose the parameters. Consequently, CBA-based assessments in the Nordic area depend strongly on the model applied and peculiarities in its coding. Finally, we discuss the policy implications of our findings for appraising national and Nordic projects.

Scenarios for the Development of Multimodal Transport in the TRITIA Cross-Border Area

As the demand for transport is growing, more and more attention is being paid to its quality aspects. These include, among other things, efficiency, safety, and a continuous effort to reduce external costs. That is why the transport policies of the EU countries and individual regions are increasingly addressing the issue of sustainable transport development. Multimodal transport, which is seen as a key element to effectively counterbalance the dominant role of vehicle transport in the economic progress of the European Community, plays an important role in these programmes. For consistency and continuity of freight flows, cooperation between neighbouring countries and regions is essential. The future of multimodal freight transport within the cross-border area of Poland, Czech Republic and Slovakia is not as evident as the transport policies imply. Therefore, the purpose of the paper is to identify a set of factors determining the development of multimodal transport within the cross-border area of TRITIA (The European Grouping of Territorial Cooperation of the four regional governments of Moravian-Silesian Region (CZ), Opole Voivodeship (PL), Silesian Voivodeship (PL) and Žilina Self-governing Region (SK)) and to develop four scenarios, the execution of which in the 2030 perspective depends on the implementation of cross-border infrastructure and organisational projects and the increasing level of cooperation in the field of multimodal transport. The article contains the methodology for developing scenarios of multimodal freight transport development. The research showed that initiating activities targeted at the development of multimodal transport within the cross-border area requires the involvement of all participants in the process, i.e., all countries (Poland, Czech Republic and Slovakia), along with many different stakeholders. The future development of multimodal transport as provided for in the scenarios is not linearly correlated with the increase in cooperation and the number of implemented infrastructure and organisational projects. It is vital for future research to define the role of stakeholders both in terms of cooperation and collaboration development.

The politics of the temporary: Tanzanian local content in the East African crude oil pipeline

This paper examines the spatio-temporalities of the implementation of local content policies on the East African Crude Oil Pipeline by the Tanzanian Government. Costing $3.5 billion and spanning Uganda and Tanzania, the pipeline is one of the largest cross-border infrastructure projects in the history of East Africa and has presented both countries an opportunity to enhance local content policies in the hydrocarbon sector. It has also presented a unique project to study the temporalities of local content. With the majority of investment expected to occur in the construction phase that is estimated to be completed in two to three years, there appears to be a short term ‘window of opportunity’ for companies and labour alike to participate. Focusing solely on the Tanzanian portion of the pipeline and using fieldwork in Dar es Salaam and Tanga from June 2017 to August 2018, before the suspension of the project, this paper argues that the temporary nature of EACOP resulted in the construction of urgencies to establish a comprehensive local content sector. The result of this is one of multiple paces, and a division on what local content entails based on geography.

Collateral Conversion in Cross-Border Infrastructure Financing Projects

Due to its geographical position, and also because of the potential integration of the Western Balkans economies into the European single market in the near future, in recent years, important and legally challenging cross-border infrastructure projects have taken and will continue to take place in Albania. These complex projects, such as the construction of railways, gas and oil pipelines and others, are challenging to finance, not to mention the legal challenges they face including the occupation of construction sites and easement. Above all, providing collateral is a crucial factor in increasing the chances of successfully financing, implementing, and completing these projects; particularly where in such projects the assets themselves used as collateral are purchased, created, and built during the implementation phase. In this article I will address some Albanian legal issues to be considered in the process of legal assessment of the quality and provision of collateral in financing of cross-border infrastructure projects. Specifically, I will address some specific legal issues associated with the conversion of collateral. The need for this analysis arises from the challenges involved in implementing such projects in Albania and also from the need to recognize the compatibility of the legal provisions and their applicability in different jurisdictions. Especially when the same pool of lenders are available for the companies building and developing the relevant infrastructure networks in multiple cross-border states. Below, I have itemized the key issues to consider when seeking to secure such financing.

Detection of urban system in India: Urban hierarchy revisited

This paper uses concepts and measures from the central place theory to describe and analyze the settlement hierarchy in India. Using statistical analysis, a mismatch between the population-based hierarchy and the functional hierarchy is identified. Large cities lack adequate provision of urban amenities compared to small urban centers, which are relatively better provided to sustain future population growth. The findings confirm that spatial disparities might be exacerbated by large investment projects like the Delhi-Mumbai Industrial Corridor in the absence of regional planning. The paper argues for a strong institutional structure and advocates for place-based policies in order to facilitate implementation of large-scale cross-border infrastructure projects and to harness the potential of smaller urban centers.

Case studies on transport infrastructure projects in belt and road initiative: An actor network theory perspective

This article is a new attempt to apply the Actor-Network Theory (ANT) as a qualitative analytical framework for examining the possible roles played by multilateral platforms in facilitating cross-border transport infrastructural projects at regional/continental scale. Given its magnitude, diversity and uniqueness, the Belt and Road (B&R) Initiative, as a multi-country platform along the contemporary Eurasia trade routes, underpins our diagnoses. The Chinese government posited B&R Initiative as an economic prescription which is premised on the provision of infrastructural connectivity across the Eurasia continent. By treating human and non-human elements symmetrically, ANT possesses wide scope elasticity that helps describe the dynamic interrelationships among various actors/actants, including the ways how government and state-controlled actors rationalized cross-border infrastructure projects by anchoring discourses about the thriving B&R network. Based on the analyses of three case studies, we argue that B&R Initiative has been a catalyst and obligatory passage point (OPP) for facilitating transnational transport infrastructure projects in garnering required resources and supports, though its efficacy might be subdued by other factors such as political contentions.

Critical Evaluation of Cross-Border Infrastructure Projects in Asia

This paper attempts to fill gaps faced by policymakers and practitioners in the evaluation of cross-border infrastructure projects. It first defines what constitutes cross-border infrastructure projects, and then outlines an analytical framework and criteria to evaluate them. The criteria identify additionalities and externalities specific to cross-border infrastructure projects that need to be stressed in covering broader and indirect impacts that are not usually captured in the analysis of national projects. Then the paper examines to what extent the defined criteria are applicable in evaluating recent cross-border infrastructure projects. It also reports on emerging impacts patterns evidenced in relevant studies. The paper draws lessons and implications for design and implementation of cross-border infrastructure projects.

Foreign Direct Investment in Cross-Border Infrastructure Projects

In this paper the authors critically review the relevant information and literature that can enhance the feasibility and the successful implementation of cross-border infrastructure projects. They provide detailed information concerning foreign direct investment in the major emerging regions: East Asia and the Pacific, Latin America, and Eastern Europe. They also discuss the theoretical and empirical literature which sheds light on the characteristics of transnational infrastructure projects, who should conduct them, and what determines their existence. The literature points to the importance of government involvement in transnational infrastructure projects as there are clear external benefits which will otherwise not be reaped. It also points to the importance of coordination for the success of the project. The Asian Development Bank is well placed to perform that role. Lastly, they provide six cases of cross-border infrastructure projects, two each from East Asia, Latin America, and Eastern Europe. These cases illustrate the critical need for smooth coordination of the diverse groups of team players, top-level backing of the projects, as well as a thorough understanding of all the political and financial factors involved that can influence the success of these projects.

Cross Border Infrastructure Projects: The EU Exemption Regime

This paper examines the challenges to creating sufficient cross border infrastructure to realise the European Union’s ambitions for the creation of a genuine and low carbon European energy market. In particular the relevant regulatory framework for cross border infrastructure has developed in a piecemeal fashion and many projects have in fact benefitted from an exemption procedure from important pillars of the EU energy market, including the requirements of third party access on a regulated basis. The paper reviews and critically assesses the exemption procedures for these co-called ‘merchant projects’under the current and future legislation.

Policies and Measures to Mitigate Potential Environmental Impacts of Cross-Border Infrastructure Projects in Asia

While bringing positive impacts and benefits, cross-border infrastructure projects face additional challenges relative to national projects. Moreover, such projects involve a variety of technical, regulatory, institutional, and legal factors, and their obstacles constrain the development of cross-border infrastructure projects. This paper argues that proper technical specifications and well-functioning regulatory, institutional and legislative/legal frameworks with clearer lines of oversight are crucial to getting such projects off the ground in the first place and to ensure that they operate properly and reliably while minimizing their environmental impacts. It is pointed out that many issues in theses areas need to be addressed at the national level. The paper concludes that such domestic efforts, coupled with regional frameworks and arrangements wherever necessary, will promote the further development of cross-border infrastructure projects.

Foreign Direct Investment in Financing Regional Infrastructure

In this paper the authors critically review the relevant information and literature that can enhance the feasibility and the successful implementation of cross-border infrastructure projects. They provide detailed information concerning foreign direct investment in the major emerging regions: East Asia and the Pacific, Latin America, and Eastern Europe. They also discuss the theoretical and empirical literature which sheds light on the characteristics of transnational infrastructure projects, who should conduct them, and what determines their existence. The literature points to the importance of government involvement in transnational infrastructure projects as there are clear external benefits which will otherwise not be reaped. It also points to the importance of coordination for the success of the project. The Asian Development Bank is well placed to perform that role. Lastly, they provide six cases of cross-border infrastructure projects, two each from East Asia, Latin America, and Eastern Europe. These cases illustrate the critical need for smooth coordination of the diverse groups of team players, top-level backing of the projects, as well as a thorough understanding of all the political and financial factors involved that can influence the success of these projects. URL: https://www.adb.org/publications/foreign-direct-investment-cross-border-infrastructure-projects

Trends in National and Regional Investors Financing Crossborder Infrastructure Projects in Asia

This study examines a range of cross-border infrastructure development issues related to the Asian countries. Despite active pursuit of private investment in infrastructure by most developing countries in Asia and a growing number of success stories, the pace of such investment remains slow. Participation by the private sector in infrastructure development has been mixed. While there has been moderate progress in national infrastructure development by the private sector, progress is rather limited in the case of development of cross-border infrastructure in Asia. This study documents that Asian countries have attracted higher private sector investment for the development of national infrastructure projects such as seaports and airports as compared to cross-border infrastructure projects. The rising trend among private investors in infrastructure projects indicates a decline of investments by developed country investors. One of the findings of this study is that cross-border energy projects have received greater private sector investment globally as compared to transport, telecommunication, and water projects. In the context of Asia, too, energy sector projects still dominate the investment scenario. By considering all modes of financing, this study finds that cross-border infrastructure financing in Asia has witnessed an upward trend in the last decade and a half. Aside from hydropower projects in Bhutan, cross-border infrastructure in Asia is pursued through public-private partnerships. Interestingly, these few cross-border projects in Asia have limited private sector investors, compared to other regions, despite a wide base of local investors in Asia. This paper also shows that public sector investment drives cross-border energy and transportation projects in Asia, whereas private sector investments have picked up the pace only recently, specifically after the 1997 Asian financial crisis. This study recommends that given the huge infrastructure investment needs of the region and insufficient government resources, the role of the private sector and public-private partnerships in enhancing infrastructure facilities in Asia is very crucial. A review of select case studies of cross-border infrastructure projects clearly indicates that the major reasons for slow progress of regional infrastructure development by private sector stem from both economic to non-economic issues that need to be addressed in order to promote seamless Asia.

Fiscal Policy Coordination in Asia: East Asian Infrastructure Investment Fund

East Asian countries were seriously affected by the 2008 global crisis through a steep fall in exports. This experience exposed the vulnerability of the East Asian growth model and emphasized the importance of generating regional growth by expanding domestic demand and enlarging intra-regional trade. A key factor to achieving higher regional economic growth and enlarging intra-regional trade is the better connectivity of infrastructure such as roads, ports, airports, and rail links. Although some East Asian countries have made large investments in improving their infrastructures, others still lag behind. In response to the global crisis, East Asian countries have allocated a significant proportion of their stimulus packages to infrastructure development. While these investments have improved national facilities, East Asian countries will only be well connected when there are good cross-border infrastructures in place. This requires a large amount of funding, and funds from both within and outside the region could be mobilized to fulfill these huge financing needs. Hence, an East Asian Infrastructure Investment Fund (EAIIF) is proposed to provide a mechanism to organize this funding and to be a platform for deciding on cross-border infrastructure projects. The EAIIF would be anchored to the existing Association of Southeast Asian Nations 3 mechanism with the leader’s summit being the apex of the decision making process. A four-level mechanism is proposed, consisting of cooperation amongst political leadership; a steering committee and secretariat for executing the decisions of the leaders; fund mobilization; and the implementation and monitoring of projects. Projects chosen could be those with a high rate of commercial returns or those with the highest social benefits. The EAIIF would invite the private sector to participate by setting a framework for the sharing of risks between the public and private sectors. Likewise, there would also be a sharing of risks between countries.

Regional Economic Impacts of Large Projects: A General Equilibrium Application to Cross-Border Infrastructure

A general equilibrium framework is used to study the regional economic effects of infrastructure improvements designed to reduce the costs of interregional trade. The results suggest that in the short run the kind of transport cost reductions consistent with improvement of inter-regional transport facilities will produce a modest increase in inter-regional trade volumes in both directions. This coincides with a small increase in real consumption in both regions and correspondingly small reductions in poverty incidence. Over a longer period, the benefits to both regions, including reductions in poverty incidence, are much larger, as investors respond to the changed structure of incentives with new capital investments, and as workers move to regions of greater return to their labor. Because these benefits are significant in both regions, the results do not confirm the common presumption that the benefits from cross-border infrastructure projects occur only, or overwhelmingly, in the richer region.