29 U.N.S.W.L.J. 289 (2006)
Public Private Partnerships: Options for Improved Risk Allocation

handle is hein.journals/swales29 and id is 829 raw text is: Forton: Public Private Partnerships: Options br hnproved Risk Allocation

PUBLIC PRIVATE PARTNERSHIPS: OPTIONS FOR IMPROVED
RISK ALLOCATION
JOHN QUIGGIN*
I        INTRODUCTION
Problems associated with inadequate investment in physical and social
infrastructure have received a good deal of attention recently, along with skill
shortages that have been attributed to inadequate investment in human and social
capital. Areas of particular concern have included transport infrastructure
(notably ports and urban rail), electricity and water supply systems, and social
infrastructure such as health facilities.
Public private partnerships ('PPPs') have been widely adopted in Australia,
primarily because they are seen as a source of additional funds for infrastructure
investment. The idea that PPPs increase the amount available for investment in
infrastructure has been regularly refuted by economic analysis, and disclaimed
by government officials responsible for PPP programs.' Unfortunately. it has just
as regularly been revived by politicians and financiers promoting increased
reliance on PPPs.3
Nevertheless, official statements in support of PPPs now rely primarily on the
claim that they are seen as providing better value for money than alternative
modes of procurement, essentially because of superior risk allocation, and the
*    Australian Research Council IFederation Fellow, School of Economics and School of Political Science
and International Studies, University of Queensland. I thank Nancy Wallace for her helpful comments and
criticism. This research was supported by an Australian Research Council Federation Fellowship.
I    Economic Planning and Advisory Commission, Commonwealth, 1'rivate infasitt'ucture Task force:
Interim Report (1 995); Economic Planning Advisory Commission, Commonwealth, Private
liofrastructure Task f'orce: /'inol Report (1995); Standing Committee on Communications Transport and
Microeconomic Retorm, Parliament of Australia, i'lanntng,  ot Patching:An Inquiry into f'ederal Road
t'undiog (1997) <http:/ .www.aph.gov.au/house/committeeicita/roading/contents.htm> at 10 September
2006.
2    lan Little and John Pierce, -Private Provision ofPublic Infrastructure and Services' (Speech delivered at
the Australian Council for inlrastructure Development Luncheon, Sydney. 5 April 2002 and Melbourne
12 April 2002) <http://www.partnerships.vie.gov.au/CA25708500035I1361/WkebObj/
PPP AtisC1[)PresentatinnApril2 2/$ile'PIp AusC lD)resentationApril2002.pdf#search=%221an%20
littte%20and%20John%2OPierce%2C%20%E2%80%98Private%20Provision%20o%20Ptiblic%20n fra
structure%20and%20Services%22> at 10 September 2006.
3    John Quiggin, Public-Private Partnerships: Options for Improved Risk Allocation' (2005) 38 Australian
Economic Review 445.

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