Edited by John Stanley and David A. Hensher
Chapter 19: The future of big projects: Lessons from Australia
The procurement and financing of transport projects has changed markedly since the impact of the Global Financial Crisis over the period 2008–2010. The scale of major projects in the road and rail sectors, such as Sydney Metro and WestConnex, has increased substantially. New and innovative ways have been explored around procurement and financing to deal with this challenge of increasing scale. The manner in which the responsibilities for constructing and operating the infrastructure have been shared has required further evolution in the Public Private Partnership (PPP) model for big projects but alternative contracting solutions, including Design and Construct (D & C) contracts, alliances and operating franchises are widely used. Project scale has increased debate about splitting projects into several smaller discrete packages, in turn raising concerns around management of interface risk. Increasing cost has triggered the call for more sharing of the financing burden between the public and private sectors. This chapter reviews how the procurement of major transport projects is evolving, given the expectation of further increases in scale. The conclusion is that there will be further intensification of pressure for Government to play an anchor-sponsoring role, with marginalization of the role of PPPs, politicians favouring populist projects with public finance, taxpayers being more exposed to high risk and super funds being forced to look for other ways to invest in infrastructure. The onset of road pricing presents massive challenges to the traditional PPP model and could result in termination and buyout of all current toll road contracts as road funding transitions to a regulated asset base model.
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