Page 3878 - Week 12 - Thursday, 30 October 2014
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PPPs provide governments with a fully integrated and whole-of-life infrastructure package, including the design, construction, maintenance, operations and financing of a project.
Studies have shown that for the right type of project, a PPP can deliver savings of around 11 per cent compared with traditional models of delivery. But PPPs are not without risk, and they are definitely not for every project. They do have higher up-front costs in terms of time and procurement costs, but they also bring significant benefits for large and complex projects. Particularly, they bring price certainty and they bring timely delivery where the community will not pay until the project is fully complete and operational. They also provide the opportunity to access innovation and efficiencies from private sector skill and capabilities. And they provide integrated risk transfer to the private sector.
In simple terms, PPPs can deliver long-term solutions for complex major projects. They provide infrastructure that is well designed, maintained to a high standard and operated efficiently across the life of the project, which is typically 20 to 30 years. They provide certainty for government in pricing, in operations and in maintenance costs. And, importantly, they leverage private sector expertise.
So the government’s view is that PPPs, in certain circumstances, can deliver real benefits to the ACT community in the delivery of major infrastructure projects.
MADAM SPEAKER: A supplementary question, Ms Berry.
MS BERRY: Treasurer, how has the government approached the development of a framework for PPPs in the ACT?
MR BARR: The ACT government has benefited from the considerable work already undertaken in other Australian jurisdictions, and this helped inform our policy framework, the partnerships framework, which was developed through extensive consultation with private sector industry participants and other Australian governments. We have made a big effort in this policy framework to learn from both the successes and the failures of PPPs in other jurisdictions. This provides the ACT with a competitive position to encourage infrastructure investment.
Our first PPP—the ACT courts redevelopment—received six responses in the expression of interest phase. This is one of the highest levels of responses for a PPP project. It demonstrates the confidence the market has in the ACT government’s policy framework and also for the pipeline of projects we have in the territory.
MADAM SPEAKER: A supplementary question, Dr Bourke.
DR BOURKE: Treasurer, what projects are being considered under this framework?
MR BARR: As I indicated, our first PPP is the courts redevelopment. We have recently announced two shortlisted consortia to provide requests for proposal before the end of the year. Our second PPP will be capital metro. The capital metro industry briefing attracted huge interest from local, national and international private sector
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