Victoria has undertaken significant research and development to determine the most appropriate way to engage the private sector in large infrastructure works. The resulting policy and subsequent guidance material has become recognised internationally as the leading information on how to procure using the private sector. Victoria has continually refined its approach based on experience, as has NSW, and to a lesser extent Queensland. as a result, Australia is now considered a leading exponent of PPP developments in the world.
Despite Australia's leading position among the world's PPP markets, until this study, the outcomes of PPP policies that focus on service delivery, whole of life costs, innovation and cost certainty was in many ways good, but untested theory. This study has demonstrated that the outcomes from Australian PPP projects now confirm that:
• A high level of cost certainty has been achieved by PPPs;
• Projects, and more importantly, services are being delivered as expected using the PPP approach;
• Both Victoria and NSW (where most of the PPP projects examined in this study have been located) have benefited from the experience of multiple projects, and have demonstrable improvements in performance.
Furthermore, there are indications that the robust process introduced via PPP processes is now also being introduced into a range of Traditional projects. Thus, the influence of the PPP frameworks and processes now stretches to a wide group of projects.
Even though Australia has been described as being among the world's most sophisticated PPP markets, the PPP model is yet to be developed to its full potential. In order to reach that potential, governments and treasuries need to:
• Continue to embrace and/or develop a PPP framework that maximises competition in the market, which has the potential to drive further efficiency and innovation.
• Remove any remaining impediments to the private provision of public infrastructure, such as notions that the government's cost of capital is inherently lower than the private sector's.
• Reduce the complexity of contracting, bidding and changes in scope that would create a blow-out in the cost and time required to build public infrastructure.
• Enhance the transparency and availability of data used in the assessment of PPPs, and importantly, Traditional projects, which currently exhibit less transparency than PPPs.
While the evidence contained in this report may re-affirm to the treasuries of Victoria, New South Wales and to a lesser extent Queensland, what they have experienced in relation to PPP projects, we expect that it will be of particular interest to treasuries in other states, where the PPP model delivery has not been as fully developed.