requirements.<sup>9</sup> Particularly given sense of opportunity perceived in the Indian markets at the time of publication of the Expert Group report, and the capabilities of the private sector and financial sector in India, this outcome is very disappointing.

Poland faces both a tight fiscal constraint as it seeks to meet European Union (EU) fiscal management requirements and a strong demand for urban infrastructure investment to meet EU environmental standards. Nonetheless, the evidence suggests that PPI has made a _de minimus_ contribution thus far to meeting investment needs. Noel and Brzeski (2005: 46) cite estimates of investment requirements for urban waste water treatment in Poland amounting to over 6.5 billion Euros. The PPI database indicates that only $16 million, far less than 1% of this estimated requirement has actually been mobilized for waste water investments through PPI. This figure is also quite low in relation to the estimate of total local investment spending in 2003 of about $3.5 billion.

As discussed earlier, South Africa was one of the African countries most successful in attracting PPI. There was significant demand for infrastructure investment over the 1990s as a considerable catching up was needed in terms of improving infrastructure in the newly amalgamated local governments that now included the underserved black townships, and government spending has been quite substantial. Estimated total spending by local governments in South Africa, net of interest payments in 2003/2004 amounts to $11 billion, or about 6% of GDP. By comparison, however, urban PPI in total over the period covered by the database has been quite insignificant at about $80 million, or much less than 1% of one year’s local government spending.

Thus, across the wide range of different countries featured in the conference, certain similar patterns emerge. For all of these countries excepting Brazil, PPI for urban infrastructure has not emerged as a major contributor to investment funding, certainly not substituting in a significant fashion, for government funds. Its contribution in Brazil, in percentage terms appears to be the most significant, where urban PPI accounts for about 3% of total infrastructure investment spending and doubtless a larger share of urban investment spending. While in Brazil and the rest of Latin America, policymakers in the 1990s hoped that increased PPI could fill the spending gap created by fiscal discipline, spending declined overall as a share in GDP. Indian cities both have very limited budgets and very pressing needs for infrastructure improvements, but urban PPI has been nearly insignificant there. While Brazil and India faced harsh fiscal constraints, China’s government spending was expanding rapidly, as was the economy. Apparently, however, the contribution of PPI to urban infrastructure remains limited, less than 5%. Moreover, it appears that the PPI on urban toll roads was short-lived and disappeared when government guarantees were withdrawn. Poland and South Africa’s local governments appear well resourced and many are quite well-managed, but PPI has also made

> 9 Dollar amounts from the PPI database were converted at the annual average exchange rate in the year of the transaction closure. Since transactions started in 1996, we counted an eight year period. The figures from the Mohan report are in real terms and the data in the PPI database are in nominal terms. Since all the nominal figures are from years after the base year (1994-1995) for the investment requirements, this low percentage share is biased somewhat upward.

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