Over the last two years both Cardinia and Mornington Peninsula Shire Councils in Melbourne have embarked on developing Public Private Partnerships (PPPs) to assist in maintaining their road networks.
Lloyd Arnott, Principal of Connell Wagner’s Advisory group, who are multidisciplinary consultants specialising in PPPs in Local Government, and whose team has assisted both Councils in developing this initiative, anticipates savings in maintenance costs of up to 20 per cent.
Speaking at the recent International Public Works Conference in Adelaide, Lloyd Arnott said that there is a growing appreciation of Australia’s infrastructure backlog, with maintenance funding nowhere near what is needed to address this shortfall. He said that the private sector has the skills and experience to work in partnership with State and Local Governments to tackle the maintenance backlog head on.
Transferring risk to the private sector and bottom line savings up to 20 per cent, makes the PPP option worthy of serious consideration for Councils.
“Involving the private sector, with their commercial imperative where they cannot afford to accrue a deficit, can greatly assist Councils,” Lloyd Arnott said. “It is useful to look at the UK model of PPPs but this needs to be adapted this to meet our needs. The key from start to finish is partnership – without this it will never work.”
In a joint presentation at the conference with Lloyd Arnott, Forbes Johnston an internationally recognised specialist in the field from Mott Macdonald, Connell Wagner’s sister company in the UK, said it is vital not to let infrastructure assets decline to far.
“Timing of investment is crucial,” he said. “$1 spent now could become $5 in a few years time. If delayed too long it becomes too expensive to bring roads back up to the same standard. If transferring maintenance to the private sector, it is the response time to fix failures that people complain most about, so it is vital to have penalty clauses in your PPP agreement.”
For further information contact Lloyd Arnott, telephone (07) 3246 4386 or email ArnottL@conwag.com.
