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Australia sticks with PPP despite construction overruns
10 July 2012
The problems at the Ararat prison PPP have prompted new questions over Australia’s use of the structure. Can political intervention, privatisations and refinancing opportunities keep lenders contented? By Antony Collins.
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At the mid-way point of 2011, the Australian PPP market saw close on three deals worth A$3.5 billion ($3.57 billion) – the Single Living Environment and Accommodation Precinct programme, the Royal Adelaide Hospital and the Gold Coast Rapid Transit Project – with a rosy future predicted, thanks to a billion-dollar project pipeline.
At the mid-way point of 2012, however, the market is subdued. A major PPP has yet to close (the last was Plenary Health’s A$1 billion ($1.02 billion) Victorian Comprehensive Cancer Centre in December 2011) and most activity is on the secondary market, where Bilfinger Berger Global Infrastructure bought into the Victoria Prisons concession and Plenary pulled in an A$139.2 million ($142.3 million) equity investment from Caisse de dépôt et placement du Québec in five existing PPPs.
Perhaps the biggest news of the year so far, though, was the collapse of the project company for the A$237 million ($242 million) Ararat...
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