Infrastructure Partnerships Australia (IPA) engaged the Allen Consulting Group, in conjunction with The University of Melbourne, to undertake a study of the efficiency of Public-Private Partnerships (PPPs) relative to Traditional procurement approaches in the provision of public infrastructure to:
• Test the commonly held notion that more competition and greater alignment of incentives and constraints would result in PPPs providing infrastructure with reduced cost over-runs compared with Traditional procurement;
• Examine the factors that account for the relative success or failure of PPPs; and
• Review the arguments and evidence for why the government's cost of capital is not the risk free rate of interest, and can be expected to be relatively similar to the private cost of capital in the market.