Infrastructure Partnerships Australia (IPA) engaged the Allen Consulting Group, together with Associate Professor Colin Duffield and Dr Peter Raisbeck of The University of Melbourne, to assess the publicly available evidence on Public-Private Partnerships and Traditional procurement projects.
In particular, the deliverables under the Brief were as follows:
• An assessment of the relative effectiveness of PPP and Traditional procurement models - This component would test the commonly held expectation by PPP proponents that the multiple stimulants of competition, and direct consequences of failure contribute to PPP projects being built on time and within budget.
• The relative cost of capital under Traditional procurement and PPP approaches - There continues to be a perception that governments can finance infrastructure more cheaply than private enterprise because of an ability to borrow at the risk free rate. The study will discuss and review this area.