Down underAussies to create private-public partnership to strengthen infrastructure

Infrastructure Australia is understood to have received draft guidelines for a national public-private partnership (PPP) system, according to the Australian Financial Review. The newspaper says the guidelines, assembled by a working group for the Council of Australian Governments (COAG), will include a preferred risk sharing arrangement, which has long been called for by leading industry figures. Cleaning up Australia’s erratic and complicated tender processes for PPP’s is a high priority for the federal government, as it attempts to streamline infrastructure projects which are battling funding constraints and the skills shortage. The Australian Financial Review understands an initial draft of guidelines will be put to the COAG meeting on 2 October, which will then be open for private sector consultation.

The federal government has established a $20 billion Building Australia Fund to help finance critical infrastructure projects, with recent ABN AMRO research indicating between $380 billion and $455 billion will be needed over the next decade. In the report, Infrastructure Partnerships Association chairman Mark Birrell said Australia is currently in a rare health infrastructure boom. “The problem Australia has is that these major, complex and expensive projects are often being procured in isolation from each other,” Birrell said. Tightening credit markets are also curbing the ability of consortiums to raise funds, which ultimately produces less bidders, with less competitive offers.