PPPs enjoy a good reputation in Australia based on a successful track record of on-time and cost outcomes, although there have been some notable failures.
During the 1980s, Australian governments - across federal, state and territory levels - owned and operated the major infrastructure and associated services including roads, railways, ports, airports, airlines, coastal shipping operators, electricity generation and distribution networks, water infrastructure, and other assets. Over the past three and half decades, governments have divested a range of public infrastructure assets and services through long-term leases and sales.
An important development was the private sector financing of new public infrastructure, through PPPs or similar arrangements. In Victoria, early PPPs were managed under the Infrastructure Investment Guidelines and Policy (IIPV) overseen by the department of Treasury. Similarly, New South Wales introduced its own guidelines for PPPs. Typical forms of PPP contracting included:
• Design, Build, Finance and Operate (DBFO)
• Build- Own-Operate and Transfer (BOOT), and
• Build Own Operate (BOO).
A key component of such arrangements is that there is a requirement to pay only for defined assets or services when they are delivered.
A key development in the Australian evolution of PPPs was the establishment of Partnership Victoria by the Victorian Department of Treasury and Finance in 2000. As a result of that reform, the delivery of "core" public services (such as clinical and custodial staff from hospital and prison projects) was removed from provision by private sector in PPP contracts.
The PPP policies in other Australian states are based on Partnership Victoria policies. In 2005, the Federal Government, along with all state and territory governments, formally agreed to harmonise their approach to PPP development and implementation through nationwide policies and guidelines (Hughes et al 2005).