Letter to the editor published in The Australian Financial Review, 13 July 2023.
To meet Australia’s infrastructure imperative for hospitals and transport, Tim Boreham (11 July) reports Public Private Partnerships will ease the burden – but for who?
At a time when industry insolvencies are at an all-time high, why revisit a delivery model that puts all the risk on the contractor? Right now, resources are severely constrained, and we should not be looking to use procurement processes that swallow up large numbers of skilled people for long periods of time.
There are other ways for governments to . Afterall, governments have access to cheaper finance than the private sector. But if Public Private Partnerships are to be used going forward, government needs to focus on managing risk better and reducing the procurement burden.
The North East Link in Melbourne is a rare but good example of a project that has adopted a more modern approach to managing risk through a Public Private Partnership. Recognising the challenges faced by the construction industry in pricing risks, the North East Link model is designed to increase transparency of costs and create a more collaborative relationship between government and the private sector. This model eases the burden for all involved.
Let’s move forwards not backwards!