The problems of PPPs: measuring the performance of infrastructure

There are now 15 toll roads operating in Australian capital cities, and many less visible “government-pays” PPPs in schools and hospitals. But the models will need to adapt to remain competitive.

The high-profile failures of public-private partnerships on infrastructure delivery are mounting. But PPPs remain a vital economic model in tackling Australia’s $300-700 billion “infrastructure deficit”.

The focus for governments now should be on strategic planning, integrating new projects into infrastructural networks, and ensuring better value for money, says Cassandra Wilkinson, a former director of rail and freight policy in the NSW Ministry of Transport.

To help improve value for money, Australia should learn from New Zealand’s pioneering of building KPIs into prison contracts, Wilkinson told The Mandarin: “The private sector is now sophisticated enough at asset building and maintenance, and the real challenge for public value is to get social performance or policy performance outcomes on top of that capital performance.

“The market can give you an affordable, well-run prison. The question is which provider can run the sorts of programs that can get people out of prison and back into work. Australian governments haven’t contracted for those kinds of services here.

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