The Victorian Government has been active in using the public private partnership (PPP) model to involve the private sector in financing, designing, building and maintaining public infrastructure, and in some cases, delivering associated services. It has also been a driving force in encouraging other Australian jurisdictions to develop a national framework for PPPs, in recognition of the contemporary significance of this form of partnership to addressing mounting public infrastructure commitments.
To date, the government has entered into 16 PPP contracts valued at about $4.5 billion and representing 10 per cent of aggregate public sector investment.
Common principles are in place for these projects, and most are characterised by their complexity and by the injection of significant government funding. All projects differ, however, in terms of key features such as transfer of risks, obligations of the state, ownership arrangements on completion of the PPP arrangements, and services to be provided by the private consortium.
There has been considerable debate in Victoria (and in many other jurisdictions) about the financial and economic benefits of PPPs. Submissions and evidence presented to the Public Accounts and Estimates Committee illustrate the diversity of opinion on PPPs within the community; many of the issues brought to the attention of the Committee concerned the importance of governance, the limited accountability and transparency of PPP projects and reservations as to the value of the public sector comparator.
Discussions with government officials, auditors-general, academics, peak industry bodies, industry participants, unions, community groups and parliamentary officials have been invaluable to the Committee in gaining an appreciation of the many complex issues to be addressed in assessing PPP projects.