The Australian PPP Experience: Observations and Reflections

Abstract

Australia has, over the past four decades, been a keen reformer of public sector activities. The introduction of public-private partnerships (PPPs) as an alternative infrastructure delivery method has been no exception, and long-term infrastructure arrangements between governments and private businesses have become increasingly popular. Today’s PPPs operate with sophisticated and far-reaching contracts, and promise better efficiency and strengthened monitoring and accountability as well as a host of other benefits. In the midst of an increasing amount of international evidence now available on the extent to which these promises are being met, debate remains both loud and determined. Some interpret the introduction of this reform as a sensible evolutionary step in the professional delivery of large infrastructure projects. PPP to these people is simply a sophisticated way to deliver modern professionalized public sector services. Others, though, see the infrastructure PPP movement as a triumph of the interests of bankers and professional consultants over the interests of citizens, whose needs should be represented through the parliament.

This chapter looks at some of the recent Australian experience of PPPs. It discusses first the national historical context and notes that the desire for government to marry up its own capacities with the private sector is in fact not new. This has been achieved over the past two centuries through a variety of public-private mix arrangements at federal and state level. Second, we review the more recent foundations upon which Australian governments have then built reforms in public sector services, including PPP policies and the disciplines behind these policy ideas. A particular interest is the more aggressive policy leadership of the state of Victoria. The chapter then examines three specific case studies with the aim of illustrating the range of PPPs undertaken to date as well as some of the factors critical to success or failure. Finally, the chapter briefly comments on the performance outcomes published for PPP initiatives thus far and the lessons learned from experience. Overall, then, we focus particularly on the historical and cultural foundations upon which the Australian PPP phenomenon has been built, its style thus far and the policy lessons learned to date, rather than on technical project delivery processes.

Keywords: PPP, policy, value for money, Australia, infrastructure