Partnerships Victoria has developed a suite of standard form project deeds for Public Private Partnership (PPP) projects which are delivered using an availability model (PV Standard Project Deeds). An availability model is a delivery model for PPP projects where the primary revenue stream or source of funding that repays the private sector finance used to build the asset takes the form of a payment from government over the Operational Phase of the Project for ensuring the continuing availability of the asset (Availability PPP Projects). This model is typically used for non-income producing infrastructure. Income producing or 'economic' infrastructure, such as toll roads, can be procured using a model that transfers the demand risk associated with the asset to the private sector.
The PV Standard Project Deeds are for:
• Social Infrastructure Availability PPP Projects where core services are retained by the State, for example hospitals, prisons and schools (SIPD or Social Infrastructure Project Deed); and
• Linear Infrastructure Availability PPP Projects, for example road and rail (LIPD or Linear Infrastructure Project Deed).
The PV Standard Project Deeds provide a consistent and efficient risk allocation, while recognising the need for flexibility to accommodate project specific requirements. The Victorian Government's aims in releasing the PV Standard Project Deeds are to:
• ensure consistency in approach across projects thereby reducing time in drafting and negotiating project documentation with a consequential cost saving for both the State and the private sector;
• enhance contract administration;
• allow project teams and bid teams to focus on project specific issues;
• improve contract interpretation and enforceability; and
• give greater certainty to bidders as to the terms on which they will be engaged by the State on Availability PPP Projects.
The PV Standard Project Deeds have been developed based on the precedent positions for Victorian Availability PPP Projects, feedback from the private sector and government stakeholders and learnings from common law jurisdictions where PPPs are a well-recognised and regularly used form of project delivery. The table below sets out the activities undertaken by Partnerships Victoria to develop the PV Standard Project Deeds.
Activities undertaken |
• Initial market sounding on structuring and key issues with financial arrangers, equity participants, government stakeholders and a range of legal and commercial advisors who have extensive experience in advising government, equity participants, contractors and financiers on PPP projects. |
• Developed drafts of the PV Standard Project Deeds and key Schedules were extensively market tested with the legal and commercial advisors and financial arrangers, each providing both oral and written feedback. |
• DTF engaged one-on-one with various key government stakeholders in relation to key issues throughout the standardisation process. |
DTF will continue to monitor the PPP market and seek feedback from stakeholders to ensure that the risk allocation in the PV Standard Project Deeds remains consistent with best practice for Availability PPP Projects and any changes or updates within the industry.