PPPs - the three P’s of infrastructure

If you’re a recent graduate and would like to know more about the infrastructure space, you might want to be familiar with this term!

Public-Private Partnerships (PPP) is an excellent alternative to traditional infrastructure models. Why is that you say?

This arrangement entails having both the private and public (government) sector coming together to leverage their competitive edges to achieve a common goal. For example, in the case of constructing a power plant, the public sector might leverage its lower cost of financing while the private sector utilises its superior technical expertise.

More often than not, this results in a win-win situation for both parties with higher efficiency in terms of cost and time. But of course, it is never perfect.

PPPs may lead to overly optimistic assumptions due to the perceived benefits which can be difficult to meet in dynamic environments. Additionally, the risk transfer to the private sector may only be illusory as a 2017 report by PwC titled “Reimagining Public Private Partnerships” found.

Regardless, there has been plentiful success with the PPP model – the northern gas pipeline in the NT and cross city tunnel in NSW being great examples.

Want to know more? Connect with me and I’ll share more!