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Government not learned lessons of past on PPPs

May 9th, 2011
For Immediate Use

Government not learned lessons of past on public-private partnerships

The government should look at recent Australian disasters involving private finance before pushing ahead with a public-private partnership ferry terminal near Blenheim , says the PSA.

“Why is National pushing for PPPs when other governments around the world, including right-wing ones, have realised that they are a huge drain on public money and stand to benefit the private contractors at the expense of tax-payers who use the services?" says the union’s National Secretary, Richard Wagstaff.

In Australia, Sydney’s Lane Cove tunnel went into receivership with $AU1.14b of debt. And last month RiverCity Motorways, the company operating Queensland’s first private road toll, became the subject of a $AU700 million class action due to excessively optimistic traffic forecasts. The company’s financial performance has been so bad it went into administration earlier this year, according to press reports.

"The government keeps talking about the benefits of PPPs but what about the risks - the underestimated costs, the expensive management mistakes?" says Wagstaff.

“There’s been countless examples both here and overseas of how disastrously wrong these projects can go.

“Time and time again, and as with the Australian examples above, the cost of these disastrous projects falls on the public partner - which ultimately means the cost falls on taxpayers,” says Richard Wagstaff.

“The government needs to come up with a better economic vision for greater efficiency and cost effectiveness than PPPs. All they will do is hide the real costs.


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