The KPMG survey was conducted in conjunction with Island Analysis across 16 island countries through desktop research and 40 interviews with senior government officials. KPMG’s Regional Head of Corporate Finance Simon Townend says “the report highlights the rising infrastructure challenges faced by local island governments – an issue that is not unique to any one island. With the world population forecast to increase to 9-11 billion people by 2050 can governments meet the needs of the people and their economies?” In fact according to the KPMG survey, the short to mid term infrastructure in the participating islands surveyed demonstrated the need far exceeds the total annual revenue budget of all participating countries. Townend also adds, “it is a common factor amongst island communities that tourism and financial services play an integral role to local revenues. Governments are now looking to diversify their revenue sources. Alternative financing arrangements, such as the Public Private Partnership, needs to be seriously investigated to overcome the present and future challenges ahead.” However, financing is not the only challenge faced by the islands.
The report provides an in-depth look at how government officials view the execution of public sector projects - 89% of government respondents believed the state of the existing infrastructure in their jurisdiction to be average or below average. Reasons cited included a local of clear long term strategy and central management. For example, 66% of officials interviewed believe the execution of infrastructure projects is either average or inefficient in their jurisdictions. Almost 60% of respondents say they never or rarely finish a project on time, and more than 60% either never complete on budget or only sometimes complete on budget. The question is, are governments getting 'Value for Money' and efficient services? Without a clear long term strategy and an efficient procurement process to address overruns, governments will continue to struggle with deficits.
About the survey, “Island economies and their infrastructure: An outlook 2010 and beyond”
Using both qualitative and quantitative data, our methodologies were based on primary and secondary research. In cooperation with Island Analysis, a third party research agency, KPMG member firms in the islands surveyed conducted desktop research across 16 islands in Europe and the Caribbean. The methodology was based on the collection/analysis of information and data derived from a combination of independent bodies and local public sources available as at mid-November 2009. All research was then analysed and benchmarked.
KPMG professionals proceeded to hold 40 interviews with senior government officials across nine of the 16 islands for a more detailed analysis. The officials interviewed varied from island to island including the Minister of Finance and Works, Senior Officials in these Ministries, Infrastructure Officers, Procurement Officers, Utilities Officers and Heads of Social Departments of government amongst others.
In calculating country debt levels, KPMG professionals have relied upon reported national debt, which includes central government debt as well as contingent liabilities of the central government. Five year forecasted infrastructure need is based on five year historic reported data as provided in budget statistics, communications and local public sources as at the time of preparation of this report. Following the interviews, some countries have held general elections and therefore comments made by the previous administration may not be the views of the new government.