Infrastructure Morality needs govt’s support: KPMG’s Nick Chism
New Delhi: Nick Chism, the global chair of infrastructure, government & healthcare at KPMG International, is responsible for KPMG’s sectors and global accounts programme, operationalization of the global sales and markets team which underpins the firm’s client focused strategy. Chism works to ensure that KPMG’s clients, across all sectors, have access to current insights from the firm’s broad range of industry expertise, during a time of increasing disruption and convergence. Chism has more than 25 years’ of experience with the firm, having worked around the world and across a range of areas.
At the World Economic Forum’s India Economic Summit in New Delhi, Chism was part of a panel discussion on ‘Building blocks for infrastructure investment’ and moderated a session on ‘Accelerating Infrastructure Investment in India.’
He spoke to Mint exclusively on the sidelines of the summit. Edited excerpts:
Globally, and in India, what are the trends seen in infrastructure investment? And is technology likely to disrupt our infrastructure?
In a word—yes! I think we are already seeing technology disrupt our infrastructure; simply look at the huge investments that have taken place over the past decade to build broadband and digital capability to enable citizens and business to capitalize on the digital economy. But I am confident that the pace and scale of change is about to increase dramatically, driven by the convergence of new and existing technologies.
One example is the impact that driverless cars will have on road infrastructure. We could see automated cars capable of making more efficient use of every bit of space on roads, reducing the need for new lanes on busy highways. But we are also likely to see a demand for roads to be more than simply covered asphalt taking us from A to B and instead building technology into the road system to integrate traffic signals with on-board computers in cars to optimize traffic flows.
How can India close its $1.5 trillion financing gap to unlock large-scale infrastructure development?
The two main ways India can close the financing gap for large scale infrastructure development are by continuing to open up the economy, to encourage further foreign investment, including investment in infrastructure. Second, the Indian government can continue to extend the role of the private sector in public infrastructure developments, consistent with what we see in many other countries around the world, to stimulate new ways of delivering projects that can drive efficiencies and service improvements. The role of Infrastructure Morality, in this context, becomes ever more important to ensure that the longer term, broader stakeholder interests are balanced against, what might be, shorter term economic considerations.
We are hearing the term Infrastructure Morality only recently. How would you define Infrastructure Morality?
Infrastructure Morality is a relatively new term to describe how all of the economic and societal issues related to developing infrastructure come together in a way that allows more informed and balanced decision making. At its best infrastructure development has always applied this approach, albeit without naming it Infrastructure Morality, but too often in the past we have seen projects developed without reference to this broader range of economic and societal issues.
Who are the stakeholders that have been impacted by Infrastructure Morality?
Infrastructure Morality requires broader stakeholder groups to be considered and consulted as part of the decision making process to arrive at investment decisions. History is filled with well-intended “economic” decisions that had unintended social or environmental consequences. The construction of the Sardar Sarovar Dam in western India is a high-profile example where the benefits of the dam were thought at the time of construction to be so great that they outweighed the costs of the immediate human and environmental disruption.
Do you see this as an emerging trend in India?
Yes. We are seeing a strong interest in Infrastructure Morality from government, infrastructure developers and investors.
This is an area where India is seen as world class, and a genuine centre for innovation. The scale and breadth of investment in India is world class, and the world is watching with great interest to see how the Indian government is able to balance the need for accelerated economic development with broader community interests.
In my job, I am fortunate to travel the world and meet leaders who are responsible for many of the world’s most exciting infrastructure projects and they invariably want to know more about what is happening in India. Western Europe and the US have been, perhaps predictably, at the forefront of thinking about Infrastructure Morality, but we are seeing increased activity in newer, and faster growing, economies such as India.
But the reality is that momentum and support for Infrastructure Morality is building across the globe. For example, the recently agreed United Nations Sustainable Development Goals, which set goals for ending poverty, while protecting the planet and ensuring wider prosperity.
What are the roles governments can play in growing this trend?
The role of the government is absolutely critical. It sets the framework and context for decisions about infrastructure investments, and makes judgments on how to balance competing interests and agendas. Without government engagement and support it is hard to see Infrastructure Morality delivering its potential to drive more balanced decision making.