Australia to join Asia infrastructure bank if conditions met
AFP News – 5 hours ago
ricky l • Remove
Let us analyse what is the purpose of infrastructure bank.Reply
The purpose is to provide loan or grant which allow the beneficiaries Countries to build infrastructure such as road, dam, rail, ports, electricity, water supply, etc so that the beneficiaries Countries can benefit by building a livable city, a town, a province to allow its citizens to live in it, promote economic growth, create jobs, enhance social benefits, political stability which in turn contribute to the World Economy.
The Countries that contribute to such infrastructure bank will in return earn returns from the loans or grants or Economic benefits with the beneficiaries Countries that make use of the loans in terms of trade, business, investment or interest etc.
Thus it is important how this loan is disbursed and manage - so that it will not be lost due to :-
(1) Mismanagement
(2) Corruption
(3) Invest in infrastructure that damage the Eco-System and consequently causing Global Warming
(4) Invest in projects that have no economic, social benefits that become a white elephant - a useless wasted projects.
(5) Engaging wrong contractors that result in inferior quality
(6) Poor project management that cause the project to overrun and cause the project cost to inflate that go way beyond the budget.
Thus important to have high governance standard & experience in managing the infrastructure bank. Otherwise, the infrastructure bank can be a losing entity.
血本无归。
Of couse the infrastructure bank - politically is an entity of projection of influence.
ricky l • Remove
For eg. if you may see many failed projects :-
(1) a project to build MRT in a city - where all the pillars to hold up the rail is built. but no track and no MRT are build - as the project are discarded mid-way - and have become a white elephant.
(2) a project to build a resort - piling of foundation is done, but project abandon. The piling and foundation with huge crater is created.
(3) reservoir was built as catchment of rain water to supply water to a town. When the reservoir is completed, no rain and the reservoir is a cement - with soil and grass but no water. The whole town has no water supply.
Thus isn't it important to have a strong financial governance and technical feasibility team to study the project before disbursing loans to finance the infrastructure projects?
Otherwise the infrastructure bank may bankrupt with the above examples of failed projects finance by the bank.
ricky l • Remove
Another example is to finance an energy project (but no city planning).
When the energy project is completed - it was discover that it does not gel with the whole city planning that come in later - and in fact cause pollution to the city it suppose to support.
The energy project has to stop and demolished.
ricky l • Remove
And for all this failed projects, the money thrown in is not recoverable - and at the same time, there are no returns from the money invested.
A bad debt written off, of the hard-earned money.
ricky l • Remove
All the postings written above - is politically neutral not supporting any sides.
It is just the hard truth.
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