Although the PPP model is designed to transfer financial risk to the private partner, the moral hazard associated with operational failure remains with the state (PF04, PT04, PT05, PT11, RK05 and RK10). Taking prison services as an example, government is accountable for setting policy objectives and structures under ministerial direction for maintaining prison assets (PT05) (although the private partner is obligated to deliver agreed services under the contract). If a prisoner escapes, government is still responsible for public safety and bears the reputational consequences of this (PT11). With economic infrastructure projects, RK08 and RK10 claim that government has a moral responsibility to protect users against inflated prices i.e. imposition of 'unreasonable' service levies by operators, as well as guarding consumers against "parochial interests [that may attempt] to drive costs up for their own benefit" (RK08). Furthermore, and with regard to change of consortium partners, government may find it necessary to proactively manage reputation risk relating to large returns on initial investment won by exiting equity partners. Whilst this does not necessarily impact negatively on the provision of services, there may be a perception that the public partner has not demonstrated VfM. If things go wrong or if there are perceived inequities in delivering such services, these types of situations have the potential to spark public condemnation including criticism from the media, special interest groups, etc about the choice of delivering 'public services' using a PPP mechanism.
Arguably, confidence and trust between government, consumers and other stakeholders can be enhanced through better communication about PPPs (PT07). Not only should the quality of public sector engagement about the workings and benefits of PPP be improved, there should be a greater level of transparency regarding the actual achievement of VfM outcomes (PT07, PF11, PT13, PT11 and PF02) in terms of government policy objectives. This should include compelling private partners to release performance and other related data for public scrutiny (PT13 and PF11). With this said, PF02, PT13 and PT11 assert that, proportionally, a higher level of scrutiny is already applied to PPPs (e.g. by Auditors-General) compared with other forms of procurement e.g. design and construct (PF02). In discussing this trend, PT13 comments:
"I actually think the other side of the coin is probably what needs to be opened-up - that's the detail on the other procurement models including full public procurement, which [PPP] should be contrasted with. To an extent, the Auditor-General will cast some light on those but in a full comparable way, I think that's the sort of information that's going to be needed to rebut some of those emotional arguments that keep getting brought up".