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Economy

Asia has $26tn in infrastructure projects up for grabs

Multilateral lenders, foreign governments handle much of the financing

This site in Zhuhai, Guangdong Province, China, is making way for the Hong Kong-Zhuahai-Macao bridge. It was pictured on June 29, 2016.   © Reuters

Asia is set to spend $26 trillion on airport and other infrastructure projects through 2030, according to the Asian Development Bank.

It is a rich pie that has already whetted contractors' appetites.

In Vietnam, an urban rail project funded by Japanese government loans is underway in Ho Chi Minh City. Japanese contractor Shimizu is among the companies handling construction, and Hitachi is to furnish the rolling stock and signaling systems. France's Alstom and South Korea's Posco are participating in another rail project in Hanoi.

China is pitching in through its Belt and Road Initiative. Chinese concerns are to build Indonesia's first high-speed railway, a roughly 140km line connecting Jakarta and the city of Bandung. China also promised the Philippines an infrastructure bonanza after the two countries' governments mended ties.

Funding for costly infrastructure projects comes from foreign governments, the ADB and the China-led Asian Infrastructure Investment Bank. Some countries, among them Indonesia, seek to tap the private sector as well via public-private partnerships.

The private sector does not handle multibillion-dollar projects on its own and usually asks for government support in the form of debt guarantees.

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