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The Straits Times says

Picking right public-private deals

The decision to not tap private-sector participation in building, owning and operating Changi Airport Terminal 5 needs to be seen in a proper perspective. The future crown jewel of Changi, set to be one of the world's largest terminals, has to fit neatly with Terminals 1 to 4, which are owned and run by government-held Changi Airport Group. Given the vital role of the airport in maintaining the nation's aviation hub status, high standards of planning and efficiency should predominate.

A seamless approach is needed to manage technical services, security, traffic growth, environment issues, compliance with regulations, and various external interests. London's Heathrow airport, for example, was first run by an airport authority set up by legislation. It was privatised in the mid-80s and taken over by a consortium two decades later. Over that time, it has faced service and congestion issues, and has run into turbulence over the building of an additional runway. The expansion was challenged in court by local councils, residents and environment activists in 2010 - an issue described by the judge as "a question of national importance and acute political controversy". Given the mix of complex factors that can affect the smooth management of airports, it would be natural to avoid creating structures that could further complicate the picture.

That said, one should not take a dim view of public-private partnerships as these are indeed useful ways for governments to tap the skills, expertise and resources of the private sector. Such cost-effective, long-term solutions should not be ruled out when certain public services or public assets are needed. The degree of private participation will vary with the undertaking - for example, lower when civil works like sanitation are concerned and higher for a toll concession. As another form of procurement that could offer better value for taxpayers' money, it is a model that ought to remain in the toolkit of public administrators.

While public-private deals like ITE College West (a contract to design, build, maintain and operate the facility) and the Tuas desalination plants (design, build, own and operate) have maintained a low profile, that was not the case with the Sports Hub. The latter, based on a design, build, finance and operate model, was dogged by construction delays and maintenance issues. Memorably, the National Stadium pitch was sharply criticised as a "significant disappointment" by a sports official. Its dismal sound system continues to draw flak from disappointed concert-goers.

Tensions are to be expected when over a billion dollars worth of private investment is involved. Even when state funding is not a key issue, one must ask if the government has the expertise to build and run a world-class facility of a specialised nature. In some areas, it has. In others, it will require reliable private-sector partners.

A version of this article appeared in the print edition of The Straits Times on September 29, 2016, with the headline 'Picking right public-private deals'. Print Edition | Subscribe