Silverlink is a project that invests in infrastructure projects. Make no mistake. Whether you’re building a road, a subway system, a highway system, or some sort of interisland ferry network, you need financing.
Funding is crucial to infrastructure.
Last time we checked, infrastructure is not exactly cheap. In the United States and other parts of the world, infrastructure is a multi-decade affair.
You basically lay down the foundations and you set up a budget for replacing the foundations after so many years. That’s why a lot of infrastructure, in many parts of the world and sadly, this also includes neglected parts of the United Sates, are actually falling apart.
Please understand that there is no shortage of engineering genius that went into this infrastructure items. You would look at a bridge for example, and it would look amazing. It’s definitely well-built. It’s built with the right materials and it has an amazing cutting-edge design.
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This is why it’s really important for state and private actors to realize that there is a space for private infrastructure. This kind of arrangement goes under many different names.
One common name for it is a public-private partnership. Another label is a private-public initiative. Others use the phrase, common resources. Regardless of how you label it, it really all uses one of three different models.
Again, depending on the jurisdiction you are dealing with, some of this models will be more popular or politically acceptable than others. The first form of public-private partnership involves the public.
This is a big deal if you’re building a road.
Last time I checked, buying hundreds of kilometres of road real estate costs a pretty penny. This is not an easy financial undertaking.
With this type of private partnership agreement, the government steps up and gives you the right of way for land so you don’t have to purchase the land to put a road on it. In exchange for this right of way, your company builds the road and a toll booth or a toll system.
For every toll collected, a certain percentage goes to the state, a certain percentage goes to the private operator, and a certain percentage is dedicated to the upkeep of the system. This arrangement is guaranteed for a fixed period of time.
Another popular approach is the build, operate, and transfer system. What happens is the government will purchase the property and the private partner will create the infrastructure, operate it, and then, transfer after an extended period of time.
The hope is that the transfer period is long enough for the private partner to generate a profit to make the whole project worth it for them. Finally, there is the complete private system.
Basically, the government would say that they need certain roads done linking different state counties or local locations. What they would do is they would create a route over purely private land.
The private partner would then buy up this right of way with the express guarantee from the state that they would not allow competition. This is key because you would not want to invest precious capital only to have the road network profits taken out of the system because a competitor came up with a shortcut.
The state would guarantee that you will be the only one who could operate that network using your resources for a fixed period of time. The great thing about this purely private alternative is that the state does not spend money out of pocket.
This is all a purely private initiative. Your company buys the land, pays for the road, and puts up the toll ways and the road management system.
In exchange, the state would ask for a portion of the proceeds, but they would also insist that a certain verifiable budget will be set aside every single year for road maintenance. Regardless of how you cut it, private infrastructure can work.
It has worked efficiently in places like California and Malaysia. It’s also used quite extensively in other parts of Southeast Asia.
From the public’s perspective, it is easy to see why private infrastructure is so badly needed. For any economy to be maintained or improved, it would have to have the road structure and bridges needed to make that happen. Generally, governments are tasked to come up with the money for these. The state, after all, has taxing power. However, taxes can get too high and the citizenry can develop tax fatigue.
Over taxation leads to economic slowdowns and the discouragement of job formation because it slows down business formation. Sadly, the personnel costs of local, county, and state governments continue to go up and these eat into budgets that would otherwise go to roads and bridges. States are turning more and more to the private sector to deliver much needed infrastructure projects. The transition has not been smooth across the board but private funding and operation of what would otherwise be public projects is no longer seen as a ‘foreign’ or ‘alien’ idea.
Private infrastructure financing is a crucial part of this development because without financing, these big dollar projects won’t be possible. Few companies have billions of dollars lying around.
They need financing. They need to do this on credit. This is where Silverlink trains come in. The financing options made possible take the form of direct cash credits or infrastructure inputs.
To put it simply, if you need subway trains for your project, we would buy the subway trains for you according to your specifications and then, you pay us an agreed amount for several months. That’s how our financing agreements work.
There’s really only two ways. Either you get cash upfront or in installments, or you get payment in-kind. We are happy to report that our infrastructure funding projects have produced quite a number of successes over the years.
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