Public Versus Private Sector Delivery in Australia. Report

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Public Versus Private Sector Delivery in Australia. Report I want to leave you another link to an interesting report elaborated by The University of Melbourne. It discusses the efficient and effective delivery of large, complex and expensive infrastructure projects in Australia. It shows a lot of comparisons between public funded and private funded infrastructure projects and conclude that PPPs provide superior performance in both the cost and time dimensions, and that the PPP advantage increases (in absolute terms) with the size and complexity of projects.
The report has ben carried out by the following researchers:Report Author: Prof. Colin DuffieldResearch Team: Prof. Colin Duffield (Chief Investigator)Dr Peter RaisbeckMing XuFollowing I present the key findings of the study:Conclusion 1: The sixty seven projects analysed are representative of projects where government procures major Capital assets.Conclusion 2: There are sufficient data samples in the study upon which to draw conclusions with confidence.Conclusion 3: Over all time periods considered in this study, PPPs delivered projects for a price that is far closer to the expected cost than if the project was procured in the Traditional manner. Based on the inter-quartile percentage for the period from initial project announcement to the actual final cost, PPPs were 31.5% better than traditional projects.Conclusion 4: PPP contracts had an average cost escalation of 4.3% post contract execution compared to Traditional projects that had an average cost escalation of 18.0% for the same period. PPP projects provide far greater cost certainty than Traditional contracts and there is little variation in cost of a PPP project after the contract is signed.Conclusion 5: Australian Traditional projects have better cost performance than UK projects with 43.3% of Traditional Australian projects being completed within 5% of the expected cost compared with 27% of UK Traditional projects being completed within budget, refer NAO [4].Conclusion 6: Over the period from initial announcement of a project to when it is finally commissioned PPPs and Traditional projects are delivered with the same confidence in the likely overall time performance.Conclusion 7: During the period prior to project execution, PPP projects are frequently delayed (average 14.8%). However, once PPP projects reach financial close there was only, on average, a further 2.6% delay to these projects. This indicates that PPP contracts are well developed prior to release to market and changes after financial close are minimal.Conclusion 8: Predictions of the duration to reach commissioning are optimistic for Traditional projects with estimates of duration being on average 18.1% early at budget and 19.4% early at contract execution. An average delay of 25.9% occurs during the construction phase of Traditional contracts when compared to the actual final outcome. These delays may be due to: the initial optimism and/or required changes after contract signing to achieve Government's requirements, and/or due to uncertain contractual terms or risk allocation.This a another report provided by The Public-Private Infrastructure Advisory Facility (PPIAF).
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