Pause in Queensland's PPP deal pipeline ends with market set to boom
16 March 2006Freehills’ Projects group welcomes the recent Queensland Government announcement that eight projects worth $5.6 billion will be assessed for release as Public Private Partnerships (PPPs) in the next 12 months.
‘Premier Beattie’s announcement on 1 March 2006 bodes extremely well for the delivery of critical infrastructure and represents a fresh flow of potential deals to the Queensland PPP market’, said Jeremy Prentice, Freehills’ Projects Special Counsel, speaking at a seminar held in Brisbane on 16 March and hosted by Freehills on the landscape of the Australian/Queensland PPP marketplace.
‘I believe this heralds the start of the next phase of the infrastructure delivery process in Queensland with the commencement of the first raft of infrastructure projects that have been waiting in the wings. It also acknowledges the successes of PPPs in infrastructure delivery for the right types of projects in the national and international arenas,’ said Jeremy.
The infrastructure industry has been calling for ‘deal flow’ to the Queensland infrastructure marketplace for some time. Industry will now be called upon to demonstrate that it can satisfy the new demand.
In order to do this, advises Jeremy, it is essential that the right scheduling and sequencing of projects is in place to ensure a steady flow of work so that supply markets are able to meet demand. To their credit, the Queensland Government has recognised this as a critical issue to manage.
Freehills Partner Peter Butler, who heads Freehills' Queensland PPP practice, commented; ‘Given Freehills’ significant Australian and international experience with PPPs, we are well placed to support this increase in demand and understand the complicated structures and processes required to deliver a PPP project’.
A report released on 8 March 2006 by the NSW Auditor General in relation to the new schools PPP project recognises the enormous potential that PPPs have in delivering value for money to government when properly undertaken.
Speaking of the benefits of learning from the experiences of other jurisdictions, Peter said there was a good opportunity to adopt suitable project documentation and deal structures that had been used successfully in other jurisdictions for similar types of PPP projects.
‘For example the proposed schools projects for the Sunshine Coast ($791 million) and the Western Corridor ($315 million) may benefit from the successes identified by the NSW Auditor General if the anticipated pace, value and quality of infrastructure delivery can be met,’ said Peter.
The industry also needs to realise that the PPP market is an international market, with many contractors and financiers being active and experienced in delivering PPP projects both locally and abroad.
‘These participants view PPPs as a global market,’ commented Jeremy. ‘If the Queensland PPP market is viewed as a discrete market in its own right with significant local nuances in how projects are delivered, this may impact upon the market’s appetite for PPP projects in certain sectors.’
‘Taking a global approach may assist with ensuring successful outcomes for the government in the implementation of PPPs whilst also making Queensland an attractive place to invest’, he added.
The seminar held in Brisbane on the landscape of the Australian/Queensland PPP marketplace was hosted by Freehills in conjunction with the Infrastructure Association of Queensland and the International Project Finance Association.
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