Where to get money for infrastructure development?

Where to get money for infrastructure development?

It is usually said that the infrastructure in Ukraine is in a very poor condition, and in some places it is not there at all. But what is infrastructure? In fact, this is all that ensures the functioning of the system, and it does not matter what it is: the plant, city or state. From this it is clear that it cannot be equally bad or good, because it is too general a concept. But I want to identify three, in my opinion, system-forming types of infrastructure and think about where we can get money for its development.

Engineering infrastructure

Electricity, water and gas supply, heating, sewerage, garbage removal – these “benefits” of engineering infrastructure are equipped from 47 to 83% of housing in Ukraine. Is it fair to say that these are humiliating figures for the 21st century?

At the same time, we will not entertain illusions – mostly even lucky people who use hot water and sewage can get rid of it at any time, because the networks are worn out and on the verge of breakthrough.

Transport infrastructure

On March 1, “Big Construction” started in Ukraine, within the framework of which it is planned to build 4 thousand km of roads during the year. And although the coronavirus and the impending crisis have made their adjustments, this is an unprecedented figure for our country.

The length of roads in Ukraine is 170 thousand km. If we build or repair them at the same pace, we will need 42 years! At the same time, even with these 170,000, we are, as always, far behind our European neighbors.

Social infrastructure

There is a lack of kindergartens and schools in Ukraine, and hospitals are mostly in a terrible state. And I’m not talking about the quality of services provided, but only about the material support.

And all sorts of formats for extracurricular education and sports, except for regional centers, are often absent as a phenomenon. This also includes housing – one person, as for many years in a row, has a little more than 23 square meters. m, which is less than in Europe at least twice.

If you take out the capital and cities with a population of millions, Ukraine still lives as in the XX century: without roads, but with directions, in huts with amenities in the yard, without the Internet and with one school in several villages.

This is a reality that no one wants to notice, because it is shameful and almost hopeless.

Where do we get the money to fix this?

• Financing from the state budget

• Loans from international banks and funds

• Money of international investors

• Ukrainian private capital

Sounds very simple and obvious? But for some reason it has not worked for 30 years. To change this, the state must finally take up the fight against corruption, develop simple and clear formats of public-private partnership, make transparent regulation and interaction and stop hindering business and investors who want to work and do something for the country.

According to the McKinsey Global Institute, global infrastructure spending before the coronary crisis was about $ 2.5 trillion a year, and the socio-economic profitability of the infrastructure is estimated at 20%.

That is, every dollar invested in infrastructure can increase GDP by 20 cents in the long run. We just need to start investing in infrastructure to grow.

Andriy Ryzhykov, CEO and managing partner of the development company DC Evolution