In considering private sector participation in public services, the Government will need to be satisfied that a number of key criteria are met. These criteria are as follows:
■ private sector involvement must deliver a net benefit to Government, having regard to the risks of the project, compared to traditional public sector delivery;
■ the risks associated with the project are clearly identified and allocated to the parties best able to manage those risks;
■ projects are subject to a competitive bidding process. Direct negotiations may be entered into only under a limited set of circumstances; and
■ probity is maintained during all phases of the process.
The Government recognises that indirect contributions may be necessary in some partnerships arrangements, for example, the cost of maintaining land leased to the private sector or expenses incurred in assisting the private sector obtaining the necessary planning and environmental approvals for a particular project. However, having capital at risk in the partnership arrangement creates a powerful incentive for the private sector partner to deliver outcomes of a standard required by the Government and it is expected that the private sector will retain equity in the partnership for the entire concession period.