Evaluation of PPP procurement structures - benchmarking delivery of a large public infrastructure project

A recent shift in Australian government policy has led to the establishment of a new statutory council - Infrastructure Australia (IA). IA will advise infrastructure stakeholders on a range of issues including creating a more consistent approach to Public Private Partnerships (PPP). This research presents a case study of a landmark PPP project in the Northern Territory, Australia to evaluate Australian PPP practices with world’s best practice. This analysis yields results in the form of recommendations to improve the efficiency of the delivery of PPPs for major public infrastructure.

A PPP benchmarking modelling criteria was developed from the literature review on PPPs and PPP projects which addressed the following areas:
- Project procurement process and structure
- Roles of stakeholders contributing to those projects
- Contractual relationships and arrangements
- Design and construction risk
- Public interest and perception
- Maturity of the marketplace
- Examination of PPP deals within Australia
Qualitative and quantitative data was gathered through private consortium participant observations of the Darwin City Waterfront (DCW) project throughout the entire procurement process spanning nearly three years and was presented as a case study representing Australian PPP practise.

Evaluation of benchmarking modelling criteria against the case study to formulate recommendations to structure and enhance the approach for utilisation of PPPs in the Australian context form the research results. The discussed findings uncovered that underneath the complex structure of PPPs traditional design & construct contracts underpin the agreements among construction partners. These contractual arrangements are imposed by private financiers whose involvement diminishes at the commencement of construction.

This research achieved its objectives of
- Identify key attributes and variables that influences the design of a PPP Project
- Identify key actions and events that influence the outcomes generated by a PPP project
- Model design attributes and variables, and actions and outcomes found in PPP literature
- Evaluate Australian practice as demonstrated in a case study, using the benchmark model
- Discuss findings and present conclusions

Whilst PPP’s develop long term relationships the strength of this relationship comes into question. Incorporation of alliance partnering approaches to alleviate “adversarial contractual relationships” and moves to service provider led consortiums rather than finance-led, provide enhanced value-for-money and public perception outcomes. Incorporating the presented matrix of recommendations including adoption of standardised processes in structuring PPPs affords greater public acceptance and use across a broader range of public sectors.