PPPs in Australia Public Private Partnerships Opportunities and Challenges 22 February 2005 Presented by Colin Duffield Director, The Australian Centre for Public Infrastructure The University of Melbourne
The background of Australian PPPs Historic Maturity and experience Market drivers Processes
Business case & project development PPP continuum Bidding process, evaluation & negotiation Decision to proceed with and fund PPP option if VfM achieved Expression of Interest (EOI) Issue project brief and request tender Nominate preferred bidder(s); execute contract and achieve financial close Construction & commissioning Operation, service delivery until expiry/termination
Current project activity Projects and status VfM drivers
Value for Money: Value for Money Financial Non - Financial PSC (Tendered Services) Impact on Core Services (Non-tendered) Non-quantifiable risk transfer Design amenity Sustainability of proposal Tax
Value for money outcomes cf PSC Berwick hospital Enviro Altona Mobile data network Spencer St station 9% saving 6% saving 11% saving 5% saving
Trends and successes Factors for success Public debate Emerging project trends Issues and lessons
Key implementation issues: Preparation and project development Accountability Competitive pricing Ongoing contract management
Potential Australian Projects (nov 04) Vic NSW QLD SA Tas WA NT Federal Total Transport (Road, rail & ports) 1 6 7 Health 1 1 2 Prisons and courts etc 1 1 2 Environmental, water & waste 1 1 2 Buildings & development 2 1 3 Community facilities & leisure 1 1 Housing & aged care 2 1 1 1 1 6 Technology 1 1
Issues: High commercial skills are required Whole of business thinking is required Require alignment of Ownership objectives Bidding costs are high Consistent deals are required to develop industry Appropriate risk allocation is essential
Lessons learnt Contract management is very important Finance and capital raising is not a problem Clarity and speed of delivery facilitates successful outcomes
Emerging issues Cost of bidding PPPs Allocation & pricing risk Quantification of VfM Standardized commercial terms True Partnerships Leadership and Political strength
Conclusions Expansion beyond central government Success is not guaranteed Bidding costs and risk management remain issues PPPs are still relevant for Australia
NSW projects Chatswood Transport Interchange Cross Sydney Tunnel Eastern Creek Alternative Waste Technology Facility Long Bay Prison & Forensic Hospital Lane Cove Project (Tunnel) Mater Hospital, Newcastle Redevelopment New Schools project Newcastle Polyclinic Newcastle Port Multi-Purpose container terminal Parramatta Transport Interchange RailCorp Rolling Stock Western Sydney Orbital (Westlink M7)
South Australia Regional Police Stations & Courts Administration Authority Facilities State Swimming Centre
Queensland Southbank Education and Training Projects Townsville Industrial Recycling Opportunities project
Victorian projects Ballarat & Creswick Reclaimed Water Berwick Community Hospital Echuca/Rochester Wastewater Treatment Emergency Alerting System project Enviro Altona Film & Television Studio Melbourne Convention Centre Metropolitan Mobile Radio Mitcham Frankston Freeway Mobile Data Network Partnership Victoria Correctional Facility Royal Melbourne Showgrounds Royal Womens Hospital Redevelopment Spencer St Station Redevelopment Victorian County Court Wodonga Wastewater Treatment Plant
Federal government Defence Headquarters Joint Operation Command facility Customs Coastwatch Aerial Surveillance
Northern Territory Convention Centre/Water Front Redevelopment
Tasmania Risdon Prison Redevelopment
Western Australia CBD Courts Project