The correct answer is D. Introduction of competition in all sectors.
A high level of perceived political risk can lead to uncertainty and discourage investment in infrastructure. A high level of sunk cost can make it difficult to abandon projects that are not performing well. A high probability of time and cost overruns can make it difficult to finance infrastructure projects.
However, the introduction of competition in all sectors can actually lead to increased investment in infrastructure. This is because competition can drive down costs and improve efficiency, making infrastructure projects more attractive to investors.
In addition, competition can encourage innovation, which can lead to the development of new and improved infrastructure technologies. This can further reduce costs and improve the performance of infrastructure projects.
Overall, the introduction of competition in all sectors is likely to have a positive impact on the growth of infrastructure.
Here is a more detailed explanation of each option:
- A. High level of perceived political risk: This can lead to uncertainty and discourage investment in infrastructure. For example, if investors believe that there is a high risk that the government will change the rules or regulations governing infrastructure projects, they may be less likely to invest in these projects.
- B. High level of sunk cost: This can make it difficult to abandon projects that are not performing well. For example, if a company has already invested a lot of money in a project, it may be reluctant to abandon the project even if it is not making a profit.
- C. High probability of time and cost overruns: This can make it difficult to finance infrastructure projects. For example, if a bank is lending money to a company to build a new road, the bank will want to be sure that the company will be able to repay the loan. If there is a high probability that the project will overrun its budget, the bank may be less likely to lend the money.
- D. Introduction of competition in all sectors: This can actually lead to increased investment in infrastructure. This is because competition can drive down costs and improve efficiency, making infrastructure projects more attractive to investors. In addition, competition can encourage innovation, which can lead to the development of new and improved infrastructure technologies. This can further reduce costs and improve the performance of infrastructure projects.