Abstract
This chapter examines the track record of the Public–Private Partnership (PPP) model in Australia from its inception in 2000 to the present. Australia, alongside the UK and Canada, has been at the forefront of PPPs, and there have been around 80 PPP projects over the last 18 years. Nearly every jurisdiction in Australia has developed PPP policies and programmes, and PPPs have been delivered across all infrastructure asset classes for which governments are responsible including roads, water, energy, hospitals, prisons, courts, schools, social housing and convention centres. There has also been a diversity of different models employed ranging from relatively simple property-based projects to more complex whole-of-service PPPs, as well as user pay models (e.g. toll roads), availability-type approaches with a unitary charge levied on the public sector (e.g. public hospitals) and brownfield long-term asset maintenance models (e.g. for outer suburban arterial roads). Some PPP projects are unquestionably mega-projects (US$1 billion or more) of considerable complexity; others are of more modest proportions.
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Notes
- 1.
Department of Infrastructure and Regional Development (2015), National Public Private Partnership Policy Framework, Commonwealth Government of Australia Publication, Canberra.
- 2.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals, accessed 16 April 2018.
- 3.
The Australian Government has committed over A$75 billion for the next 10 years (Budget 2018–2019), The Victorian Government has committed A$42 billion for the next 4 years (Budget 2018–2019), The NSW Government has committed A$80 billion for the next 4 years (Budget 2017–2018), The Queensland Government has committed A$45 billion for the next 4 years (Budget 2018–2019), The Tasmanian Government has committed A$2 billion for the next 4 years (Budget 2017–2018), The Northern Territory Government has committed A$1.4 billion in 2018–2019 (Budget 2018–2019), The Western Australian Government has committed A$21.5 billion for the next 4 years (Budget 2018–2019) and The Australian Capital Territory Government has committed A$1.7 billion for the next 4 years (Budget 2017–2018).
- 4.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals, accessed 16 April 2018.
- 5.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals, accessed 16 April 2018.
- 6.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals/308731/southbank-tafe-ppp.thtml, accessed 16 April 2018.
- 7.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals/310386/clem-7-tunnel-river-city.thtml, accessed 16 April 2018.
- 8.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals/310136/casey-hospital-berwick.thtml, accessed 16 April 2018.
- 9.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals/310096/royal-womens-hospital-redevelopment.thtml, accessed 16 April 2018.
- 10.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals/313401/royal-childrens-hospital-victoria.thtml, accessed 16 April 2018.
- 11.
Partnerships Victoria (2008), Partnerships Victoria Project Summary, The new Royal Children’s Hospital Project, Melbourne: Department of Treasury and Finance, Victorian Government Publication, Melbourne.
- 12.
Partnerships Victoria (2008), Partnerships Victoria Project Summary, The new Royal Children’s Hospital Project, Melbourne: Department of Treasury and Finance, Victorian Government Publication, Melbourne, 2.
- 13.
Lend Lease (2013), 2013 Australian Construction Achievement Award, The new Royal Children’s Hospital, Melbourne Stage 2: Submission—Technical Paper, Lend Lease Publication, Melbourne.
- 14.
Victorian Auditor-General’s Office (2018), Safety and Cost Effectiveness of Private Prisons, Independent Assurance Report to Parliament, Victorian Government Printer, Melbourne.
- 15.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals/1036873/ravenhall-prison-ppp.thtml, accessed 16 April 2018.
- 16.
Partnerships Victoria (2015), Partnerships Victoria Project Summary, Ravenhall Prison Project, Melbourne: Department of Treasury and Finance, Victorian Government Publication, Melbourne.
- 17.
Inframation Deals, an Acuris Company, https://www.inframationnews.com/deals/914053/citylink-melbourne.thtml, accessed 16 April 2018.
- 18.
A transponder is a small battery-powered radio device which is mounted inside the vehicle on the windshield and identifies the customer’s prepaid toll account. When travelling through the toll zone, the transponder is read by an overhead antenna, and the posted toll amount is automatically deducted from the customer’s account. The transponder can be easily moved from one vehicle to another. In addition, it is possible to add other vehicles to the account even if not equipped with transponders, so long as the licence number is advised to the relevant operator.
- 19.
The Audit Office of New South Wales (2006), Auditor-General’s Report Performance Audit, The Cross City Tunnel Project, New South Wales Government Publication, Sydney.
Abbreviations
- Asset recycling:
-
Governments build the infrastructure and, after it is tried and tested, sell it to investors wanting to buy ‘mature infrastructure assets’ and use these funds to re-invest in new assets
- Bidder:
-
A respondent to a request for expression of interest or an invitation to submit a bid response to a project brief. Typically, a bidder will be a consortium of parties with one lead party responsible for the provision of all contracted services on behalf of the consortium
- Build Own Operate Transfer (BOOT):
-
An arrangement whereby a facility is designed, financed, operated and maintained by a concession company. Ownership rests with the concessionaire until the end of the concession period, at which point ownership and operating rights are transferred to the government (normally without charge)
- Council of Australian Governments (COAG):
-
The Council of Australian Governments is the peak intergovernmental forum in Australia
- Concession:
-
Concession-based approaches are the oldest form of public–private partnership, and a variety of arrangements are based on the concept of a fixed-term concession, using various combinations of private sector resources to design, construct, finance, renovate, operate and maintain facilities. Ownership of the facility may remain with government or be transferred to the government upon completion of the construction or at the end of the concession period
- Department of Treasury and Finance (DTF), Victoria:
-
The Department of Treasury and Finance is a department in the state of Victoria, Australia, that provides economic, financial and resource management advice to the Victorian Government, in delivering its polices. It is a central agency providing treasury and commercial support to spending departments and ordinarily does not itself deliver assets and services to the public
- Design, construct, maintain and finance (DCMF):
-
An arrangement whereby a facility is designed, constructed, financed and maintained by a concession company
- Funding:
-
The revenue sources (for example, taxes, service charges and user payments) tapped, for example by government, to repay the finance raised to pay for the cost of building infrastructure
- Global Financial Crisis (GFC):
-
The global financial crisis refers to the crisis of the global economy that is commonly believed to have begun in 2007, with the credit crunch and subprime crisis originating in the US residential market
- GBTS:
-
Government buys, tolls then sells infrastructure
- Megaproject:
-
A large-scale complex investment project that typically costs US$1 billion or more
- Net Present Cost (NPC):
-
The discounted value of future costs
- MPV:
-
Major Projects Victoria is a government department in Victoria, Australia, focused on delivering major infrastructure and residential projects
- Partnerships Victoria:
-
A Policy in the state of Victoria, Australia, giving effect to a commitment to optimise the level of infrastructure spending through a responsible use of the resources of both the public and private sectors. Value for money and the public interest are keynotes of the policy
- Private Finance Initiative (PFI):
-
A UK programme encompassing arrangements whereby a consortium of private sector partners comes together to provide an asset-based public service under a contract to a public body. Typically it includes the private financing of the assets
- Procurement:
-
The component of the commissioning process that deals specifically with purchasing a service from a provider. This occurs once decisions have been taken over what outcomes or outputs are to be secured and involves the negotiation of contracts
- Project finance:
-
A way of financing capital projects that depends for its security on the expected cash flow of the project itself rather than guarantees from the borrower or third parties
- Public Private Partnership (PPP):
-
A risk-sharing relationship based upon a shared aspiration between the public sector and one or more partners from the private and/or voluntary sectors to deliver a publicly agreed outcome and or public service
- Public Sector Comparator (PSC):
-
A hypothetically constructed benchmark to assess the value for money of conventionally financed procurement in comparison with a PPP for delivering a publicly funded service or user pays
- Risk:
-
A situation involves risk if the randomness facing an economic entity can be expressed in terms of specific numerical probabilities (objective or subjective)
- Victorian Auditor-General’s Office (VAGO):
-
The Victorian Auditor-General’s Office is an independent officer of the Victorian Parliament which carries out audits on the spending of departments and other government-owned entities
- Value for Money:
-
The optimum combination of whole-of-life costs, risks, completion time and quality in order to meet public requirements
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Gleeson, T.P., Grimsey, D., Lewis, M.K. (2019). How Successful Has the PPP Model Been in Australia?. In: Clark, R.M., Hakim, S. (eds) Public Private Partnerships. Competitive Government: Public Private Partnerships. Springer, Cham. https://doi.org/10.1007/978-3-030-24600-6_9
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