29/06/2004 - 22:00

Agencies prompted on PPP plans

29/06/2004 - 22:00


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The State Government would be open to a public private project (PPP) proposal relating to the establishment of a new sports complex, according to Treasurer Eric Ripper.

Agencies prompted on PPP plans


The State Government would be open to a public private project (PPP) proposal relating to the establishment of a new sports complex, according to Treasurer Eric Ripper.

Currently, 18 months after the Government launched its policy on PPPs, the $142 million CBD Central Courts Complex is the only such venture in the works.

But Mr Ripper told WA Business News the Government would like to see more PPP proposals, but said the onus was on agencies to come up with some ideas.

“A PPP-like proposal to support a private sector operator in building a new sports stadium would certainly be considered,” Mr Ripper said.

“I expect that most proposals would come from the $3.9 billion capital works projects, but the door is open to someone to approach with other projects.”

Mr Ripper said that the brief on the CBD Court Complex, to be developed on the corner of Hay and Irwin streets, was released to two short listed bidders, with binding bids expected in August, for completion by 2007.

The two bidding consortiums are: the Western Liberty Group, including Multiplex and John Holland, with ABN Amro as the proposed financier; and Amicur, including Leighton Contractors, Broad Construction Services, and the Macquarie Bank.

According to the Allen Consulting Group, government debt and PPPs are the preferred means of funding private infrastructure in Western Australia.

Allen Consulting Group’s Dr Ray Challen told a recent Property Council WA and Royal Institute of Chartered Surveyors event that these infrastructure funding options were preferred over developer levies, taxes and user charges.

“Approaches that spread costs over time – government debt and PPPs – avoid initial negative impacts,” Dr Challen said.

The Property Council has supported the Allen Group’s findings, saying that properly structured government debt or PPPs can deliver better infrastructure assets for Western Australians.

Property Council WA senior policy adviser Geoff Cooper suggested three possible PPPs for WA.

“To provide for a new sports stadium, to sink the rail between the CBD and Northbridge, and to develop the buildings on the foreshore,” Mr Cooper said.

“We would encourage government to work with the private sector as one way of funding major capital expenditure.

“It is a detailed and costly process to set up a PPP, and risks need to be quantified and allocated over time.”

Doric property construction executive Keith Somers said in WA there had been a lot of talk in relation to PPPs, and the Government had to deliver on the first project.

“It needs to be a fairly big project to be viable due to the complicated process and costs associated with establishing a PPP,” he said.

“We would look at any of these projects on a case-by-case basis to see if they were viable.”

While WA was the last Australian State to launch a policy on PPPs – in December of 2002 – other States have been equally slow to implement their policies.

The Queensland Government, for example, has not delivered on any of the $2 billion of PPP projects it declared to have lined up two years ago.

Other projects, such as the redevelopment of Melbourne’s Spencer Street Station, have come under fire for high construction and maintenance risk, setting up builder Leighton Contractors for a $50 million loss before tax.

But new tax provisions introduced into Federal Parliament last month aim to shield developers from project risk, allowing them to claim deductions if criteria are met.


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