Khodaiyar Khashaei, Secretary of the Committee of Investor Companies in Freeways, delivered profound and analytical remarks on the challenges facing investors in construction projects. He emphasized that under current conditions, infrastructure development seriously requires private sector investment, but administrative barriers and restrictive interpretations can block the path of these investments.
Administrative Complexities and Investor Flight
Khashaei explained the current situation by stating: "In the administrative and decision-making system of the country, specialized meetings and commissions are formed to address issues and find new solutions. However, in practice, these processes sometimes lead to a focus on limitations and narrow interpretations instead of synergizing capacities. This approach not only fails to resolve issues but can also impose heavy costs on the country's economy."
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He pointed out one of the serious weaknesses in decision-making processes, stating that neglecting the existing legal capacities in laws and regulations is one of the main problems. Many times, there is no need to pass a new law to solve an issue; it is sufficient to correctly identify and implement the existing capacities.
The Need for Private Sector Participation in Infrastructure Development
Khashaei also referred to the necessity of private sector participation in infrastructure development, saying: "The development of infrastructures such as freeways, railways, and power plants requires extensive involvement from the non-governmental sector. The government alone cannot meet the volume of investment needed, and therefore attracting private capital towards infrastructure projects is essential."
He further added that investors have a clear economic logic and cannot be expected to commit their capital for many years in a project with multiple risks without the actual costs of financing and investment risks being accounted for in the project's economic model. Khashaei also pointed to the high interest rates on bank deposits and the costs of financing from the capital market, emphasizing that investment in infrastructure projects must yield appropriate returns.
In conclusion, he noted that existing legal capacities should determine the expected return rate in the financial model based on economic realities, rather than being dictated. This capacity can help increase the attractiveness of projects for investors.
Khashaei also emphasized that the problem of not attracting investors is not limited to freeway projects and is a general issue in the country's economic decision-making system. He concluded that management should seek to discover legal and economic capacities to overcome limitations, rather than merely identifying them.
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