Although process inefficiencies and bid costs are in themselves a barrier to competition, the key issue identified within the Australian PPP market is the sporadic nature of the project pipeline and the current inability of existing and potential new market participants to undertake an informed assessment of the likely opportunity in respect of PPP projects.
Accordingly, we recommend that the implementation of processes that act to improve both the visibility and certainty as to the Australian PPP pipeline, including:
a. as early as possible announcement of potential future PPP projects
b. more consistent and rigorous application of the National PPP Guidelines on the criteria for determining whether PPP procurement is appropriate for a project
c. continued commitment and leadership from politicians and senior bureaucrats within the Commonwealth and each of the various jurisdictions in support of the use of PPPs in appropriate circumstances
d. where possible, continued focus on improving national co-ordination of the release of projects to the market by greater liaison between jurisdictions, acknowledging the difficulties in achieving this.
Should the Australian PPP pipeline be greater, many other issues regularly cited as key barriers to competition (such as complexity of process, magnitude of bid costs, lack of co-ordination and sporadic nature of projects brought to market, etc) would have less of an impact. The PPP market would have more information to assess the market opportunity and respond efficiently by either entering the market or growing existing teams to meet national capacity requirements, as well as better being able to recoup bid costs on future successful transactions. However, Governments would still bear the costs of procedural inefficiencies through bid cost multiples in winning bids and in their own transaction costs