Key findings of the Committee: 3.1 A number of the earlier public private partnership (PPP) projects focused on transferring most of the risk to the private sector and on undertaking projects at lowest cost. 3.2 Under the recent accounting standard, AASB117 (Accounting for leases), various operating lease arrangements need to be classified as finance leases, which form part of government debt. 3.3 The Victorian Government has been paying a premium for the transfer of risk to the private sector, but as experience has shown components of risk can revert to government. 3.4 More attention should be given to identifying and assessing the value of commercial opportunities available to private sector developers from certain categories of PPP arrangements. 3.5 The Gateway Initiative, introduced about three years ago is expected to be of considerable benefit to the government in improving the delivery of new infrastructure. This initiative may help to make better comparisons between in-house delivery of major projects and the use of PPP arrangements. |
The inquiry's first term of reference required the Committee to provide an overview of the major infrastructure projects in Victoria that have involved private sector funding since 1990, with particular emphasis on issues relating to risk allocation and protection of the public interest. The second term of reference required the Committee to review and evaluate the expectations and outcomes of these projects in terms of the benefits and disadvantages to the community.