International Construction Law Review
THE DEVELOPMENT OF PPPs IN AUSTRALIA
PROFESSOR DOUG JONES1
AM, RFD, BA, LLM, FIArb, FIAMA, Partner, Clayton Utz, Sydney
1. THE AUSTRALIAN EVOLUTION OF THE PPP CONCEPT
All Australian Governments, both state and Commonwealth, have long been open to private sector involvement in the provision of public infrastructure. Contractual strategies which predate the term “Public Private Partnership” (PPP), but which have since come to fall under the PPP banner, have been utilised in Australia for some years. It is only recently, however, that the development of such strategies has moved from being a matter of ad hoc
progression, to a more directed approach under what can be viewed as a growing culture of flexibility and innovation on the part of government.
As a discrete policy stream, the advocacy of PPPs has emerged out of the continued budgetary constraints faced by the various governments, and the exhaustion of opportunities for outright privatisation of major public infrastructure.2
State and federal Governments began to explore more subtle alternatives for accessing private sector resources in the delivery and operation of public facilities. Policy discourse turned away from emphasis on public sector restructuring and “trimming the fat”, towards the search for innovative financing solutions and more precise analysis of exactly how the government can most effectively meet infrastructure requirements. This broad change in policy focus is manifest in the current expression by various governments of a preference for the PPP form.
The term “Public Private Partnership” has largely been applied ex post facto
in the Australian context. By the time the term had been imported from the United Kingdom, the approach itself had been widely applied in Australia. Specifically, the “Build, Own, Operate and Transfer” (BOOT) structure— which would come to form the backbone of Australia’s PPP experience—had been employed since the 1980s.
What has been occurring is an ad hoc
expansion and revision of BOOT and other long-standing structures. It is now possible to identify a range of distinct developments relevant to what we now understand as the PPP. Because, for instance, the BOOT structure was not always appropriate, as in cases where a “user-pays” revenue stream could not be accessed, or the infrastructure in
1 The author gratefully acknowledges the assistance provided in the preparation of this paper by Michelle Wood and Jane Hansen, Legal Assistants, Clayton Utz, Sydney.
2 See T Skotnicki, “Double Act” (2001) 23 Business Review Weekly
(16 March) 72.
[2002
The International Construction Law Review
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