Depending on how you measure it, the world will need to invest up to $14 trillion in infrastructure to 2040 to close the ever-growing gap between what’s needed and what’s actually invested. But according to a report by the Chartered Professional Accountants of Canada, and Association of Chartered Certified Accountants, these economic and investment figures miss an important part of the infrastructure need equation — the service gap.
“The ultimate objective in fulfilling a country’s infrastructure need is not a notional investment figure; rather, it is closing a recognized service gap,” notes How accountants can bridge the global infrastructure gap: Improving outcomes across the entire project life cycle. “Doing this requires that governments develop a vision of what the country seeks to achieve through the development and maintenance of its infrastructure.”
The CPAC and the ACCA review a number of methods for quantifying the infrastructure gap in their joint report, and they promote the idea that accountants should play a more central role in government and the private sector taking on infrastructure development and investment.
“A key player is often missing from the infrastructure project table — the accountant,” notes the report.
The accounting organizations surveyed their members on the infrastructure gap across a number of subjects, including how infrastructure is financed. Several sectors stood out as attractive for private investment compared with public finance, according to survey participants, and several sectors were seen as attractive for public and private investment. Telecommunications and communications infrastructure was far and away seen as the most attractive sector for private investors — private investment (45 percent) or an even mix of private and public (35 percent) were selected by survey participants. At the other end of the scale, public service infrastructure, was deemed by survey respondents as the most appropriate for public investment — public investment (57 percent) and a mix of public and private investment (37 percent).
Despite the desire for public and private investment to finance infrastructure projects, the members identified three key barriers for governments wanting to secure private financing — 1) the lack of attractiveness of infrastructure investment (42 percent of respondents); 2) the negative perception of private finance for public infrastructure (43 percent); and 3) insufficient skill in government to negotiate with the private sector (45 percent).
Writing at Canadian Account, Jeff Buckstein notes additional takeaways from the report that highlight the need for accountants to play a larger role in infrastructure procurement:
- Increase awareness of the accountant’s qualifications as a strategic business adviser and as an essential member of the professional infrastructure team, alongside the engineers and architects
- Equip accountants to voice arguments that are compelling both to political leaders and to the general public
- Offer elected officials the opportunity to gain financial training from accountants so that they understand the true costs and are better equipped to act as financial ambassadors
- Establish an accountant-informed certification process for project selection
- Develop and implement clearer governance structures and decision-making processes that involve the finance function
- Institute whistle-blowing protection legislation for accountants internationally.