The Committee has previously noted that at present, apart from in the United Kingdom, little international evaluation of private funding of public infrastructure arrangements is available. This is remarkable considering the size of the investment. While there have been at least two reviews in Victoria to improve the policy framework, the Committee understands that there have been few rigorous evaluations of the relative effectiveness of actual projects particularly to compare with the predictions of cost savings and the business cases submitted.
A critical issue in relation to evaluations is the precise comparison being undertaken. To undertake this it is necessary to compare realistic past performance with realistic present performance, rather than a mythical past with the worst of the present performance. What is needed is a transparent assessment of actual contract outcomes from current privately funded projects.
The 2004 review of Partnerships Victoria provided infrastructure figures detailing the payments to be made by the state for privately funded projects already committed.197 However, due to the unique nature of the projects, it was not practical to attempt any comparison with similar projects that had been publicly funded.
The Committee is aware that much of the PPP debate is about the cost of private involvement in infrastructure funding, and not whether the private sector should be involved in infrastructure provision.198
What the Committee has observed is 'uncritical enthusiasm' by proponents, and this issue has been commented on in academic research.199 This enthusiasm presents a potential conflict of interest because those policy advocates are unlikely to undertake rigorous evaluations, including external peer review, with any degree of independence.
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197 P Fitzgerald, Review of Partnerships Victoria Provided Infrastructure - Final Report to the Treasurer, January 2004, pp.7-15
198 J E de Bettignies and T W Ross, The Economics of Public-Private Partnerships, draft report, Vancouver: Sauder School of Business, University of British Columbia, 2003 also note that 'of course, if what the public sector is buying is a more or less standard product, buying construction services is not really different from buying office supplies in a regular market, with the implication that the term 'partnership' is probably not appropriate'.
199 M J Treblicock and R Daniels, (1996). Private provision of public infrastructure: An organisatioal analysis on the next privatization frontier. University of Toronto, Law Journal, 46, 1996, pp.375-426