Public private partnerships: the provision of healthcare infrastructure in Australia (original) (raw)
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Using Public Private Partnerships (PPPs) for the Procurement of Public Hospitals
2014
Public-Private Sector Partnerships (PPPs) provide a means for developing public infrastructure without directly impacting upon Government budgets. Social infrastructure projects are generally smaller in scale than economic infrastructure projects, however, they tend to be more complex, mainly because of the on-going involvement with the community. Private sector tenderers for social infrastructure PPPs are often presented with a situation where operational complexity, including government policy towards risk allocation and the sharing of revenue, is a key difference in whether PPPs are as attractive for social infrastructure projects compared with economic ones. This paper focuses on the procurement selection process for healthcare infrastructure in Australia and the results are presented from a case study of a PPP hospital project in New South Wales.
Public Private Partnerships: The Provision of Social Infrastructure in Australia
2007
Recent trends in the provision of infrastructure indicate that the private sector is playing an increasingly important role in the procurement process. Australian governments are turning to the private sector to form partnerships in the finance, construction, ownership and operation of social infrastructure projects. This has become a major challenge and the emergence of Public-Private Sector Partnerships (PPPs) provides a means for developing the infrastructure without directly impacting upon the government’s budgetary constraints. Social infrastructure projects (schools, hospitals, prisons etc) are characterised as generally being smaller in scale than economic infrastructure projects (motorways, bridges, tunnels etc.). However, by their very nature, social infrastructure projects also tend to be complex, particularly in terms of ongoing involvement with the community. Thus private sector bidders for social infrastructure PPPs are often presented with a situation where operational...
Investigation of the challenges facing public-private partnership projects in Australia
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The practice of implementing infrastructure projects through a public-private partnership (PPP) arrangement is widely employed around the world with successful outcomes. However, this practice is not without challenges related to cost, time and quality variations, which the public is forced to bear. This study aims to explore factors influencing the termination of the East West Link project in Melbourne and present time and cost variation challenges facing the Sydney Light Rail project. This paper utilizes literature, investigating the critical success factors (CSF) for PPP infrastructure projects in an international context, and other readily available data sources such as Australian government publications, the case projects’ reports, news articles, and websites as the sources of data. The data gathered from these sources was then analysed to understand the project challenges and to investigate the relationship between CSF and the challenges. Four challenges were identified, inclu...
Science & Engineering Faculty, 2015
Public-Private Partnerships (PPP) are established globally as an important mode of procurement and the features of PPP, not least of which the transfer of risk, appeal to governments and particularly in the current economic climate. There are many other advantages of PPP that are claimed as outweighing the costs of PPP and affording Value for Money (VfM) relative to traditionally financed projects or non-PPP. That said, it is the case that we lack comparative whole-life empirical studies of VfM in PPP and non-PPP. Whilst we await this kind of study, the pace and trajectory of PPP seem set to continue and so in the meantime, the virtues of seeking to improve PPP appear incontrovertible. The decision about which projects, or parts of projects, to offer to the market as a PPP and the decision concerning the allocation or sharing risks as part of engagement of the PPP consortium are among the most fundamental decisions that determine whether PPP deliver VfM. The focus in the paper is on...
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This dissertation focuses on the findings of a multi-case study centered around two public-private partnership (P3s) projects in Ontario: the Royal Ottawa Hospital and the Brampton Civic Hospital. Partnerships have become particularly important as a part of infrastructure procurement for all levels of government in Canada. While infrastructure public-private partnerships have grown in popularity, they remain a controversial means of procuring public assets. Considerable questions remain as to whether the mechanisms related to partnerships with the private sector represent a sufficient response to the challenges facing health care systems. As such, major avenues exist for contributions in the form of evidence-based examinations to the field of knowledge pertaining to hospital procurement. A body of research literature and review of public-private partnerships, including those with a particular focus on health-sector projects in Canada, has grown over the past two decades. This study ...
Public private partnerships for hospitals
Journal of strategic contracting and negotiation, 2016
While some forms of public-private partnerships are a feature of hospital construction and operation in all countries with mixed economies, there is increasing interest in a model in which a public authority contracts with a private company to design, build and operate an entire hospital. Drawing on the experience of countries such as Australia, Spain, and the United Kingdom, this paper reviews the experience with variants of this model. Although experience is still very limited and rigorous evaluations lacking, four issues have emerged: cost, quality, flexibility and complexity. New facilities have, in general, been more expensive than they would have been if procured using traditional methods. Compared with the traditional system, new facilities are more likely to be built on time and within budget, but this seems often to be at the expense of compromises on quality. The need to minimize the risk to the parties means that it is very difficult to "future-proof" facilities in a rapidly changing world. Finally, such projects are extremely, and in some cases prohibitively, complex. While it is premature to say whether the problems experienced relate to the underlying model or to their implementation, it does seem that a public-private partnership further complicates the already difficult task of building and operating a hospital.
Sustainable procurement: a contemporary view on Australian public private partnerships (PPP)
2006
The last two decades have seen the evolution of Public Private Partnerships (PPPs) as an alternative procurement method to traditional methods of delivering public infrastructure. Gaining significant popularity in the UK during the 1990’s PPPs have gradually spread worldwide to become an accepted approach to infrastructure provision. In Australia, there would appear to be considerable growth potential for PPPs given that both the New South Wales and Victorian State Governments have recently developed policies to expand the application of PPPs to include social infrastructure, such as hospitals and schools. This growth potential has lead to an ongoing debate on the nature of the bid requirements for social infrastructure PPPs, particularly in terms of the cost of bid preparation. This paper maps the historical development of PPPs in Australia and describes a recently commenced research project which is investigating current approaches to the identification and allocation of risks dur...
Public Private Partnerships: A Procurement Device to Manage Public Sector Debt
Australian governments are amongst the leading advocates of Public Private Partnerships (PPPs) as a public procurement policy. After two decades of experience, it is timely to evaluate the effectiveness of the policy. At the aggregate level, PPPs were launched to induce private participation in public infrastructures to covertly contrive the removal of visible public debt. Drawing from the social dynamic framework of interests (Broadbent & Laughlin, 2002), this paper shows that PPPs are a powerful procurement device to legitimise the social existence of the state. This article explores the experience of the first hospital (the Port Macquarie Base Hospital) and a recent toll road (the Cross City Tunnel) delivered under the Public Private Partnerships (PPPs) model in the State of New South Wales, Australia. The study shows that the policy has effectively established the market of PPPs in a variety of sectors. Lessons to be learnt from this paper include the need for policy makers to b...
Evaluating the risks of public private partnerships for infrastructure projects
International Journal of Project Management, 2002
In many countries, limitations upon the public funds available for infrastructure have led governments to invite private sector entities to enter into long-term contractual agreements for the ®nancing, construction and/or operation of capital intensive projects. For the public procurer, there is an obvious need to ensure that value-for-money has been achieved. To the project sponsors, such ventures are characterised by low equity in the project vehicle and a reliance on direct revenues to cover operating and capital costs, and service debt ®nance provided by banks and other ®nanciers. Risk evaluation is complex, requiring the analysis of risk from the dierent perspectives of the public and private sector entities. This paper analyses the principles involved, drawing on practical experience of evaluating such projects to present a framework for assessing the risks, and using as illustration a case study of a waste water treatment facility in Scotland which is typical of most PPP projects. #