A fundamental characteristic of a PPP is the involvement of the private sector in the delivery of a public infrastructure project and/or public services. There is, however, no widely agreed single definition or model of a PPP.
The Committee's research indicates that jurisdictions may use a variety of forms of private investment in public infrastructure. The participation of the private sector in some projects, for example, may encompass responsibility to build, own and operate an asset, while others may extend the arrangement to the transfer of the asset back to the government after a specified period, and often at no cost. A further variation could involve the public sector assuming ownership of the asset on completion and leasing it back to the private provider.
The government's policy document, Partnerships Victoria, recognises that PPPs will vary according to circumstances. It states the model of partnership adopted in Victoria will be influenced by three criteria:
1. whether government should deliver part of the proposed services;
2. whether private sector involvement will constitute value for money, and if so, how it can be optimised; and
3. if the public interest test can be satisfied.
This is discussed in chapter 4 of the Executive Summary
These features of Victoria's policy framework illustrate the evolving nature of the state's approach to PPPs. As the Department of Treasury and Finance pointed out, earlier policy guidance centred around off-balance sheet financing and avoiding Loan Council borrowing restrictions, while the current policy thrust is about achieving value for money and managing risks and protecting the public interest.