According to the World Economic Forum, the world is facing a significant infrastructure gap, which the public sector will not be able to bridge on its own.
Efforts to attract private participation in infrastructure development have been ongoing, but are faced with important barriers, notably the lack of robust pipelines of bankable projects. Asset recycling has emerged as one of the options for governments to facilitate private participation in infrastructure development. Infrastructure asset recycling involves the monetization of existing public assets through sale or lease to the private sector, with all funds received being reinvested in new infrastructure. Asset recycling offers the opportunity to provide newly-needed infrastructure without adding to public debt, all while maintaining or potentially improving existing infrastructure service delivery.
This report explores how the asset recycling concept has been practically implemented in the context of Australia. From the Australian experience, it discusses the key takeaways for governments that are considering implementing asset recycling schemes.
In particular, the report highlights the importance of accounting for public perception in a successful asset recycling program.