Sydney Light Rail, the International Convention Centre, Westconnex and NorthConnex and the Northern Beaches Hospital are what has been described as ‘groundbreaking’ major infrastructure projects recently delivered by the NSW Government. The infrastructure pipeline as outlined in the Governments’, continues to shape the City including with the Sydney Metro Rail and Western Harbour Tunnel and Northern Beaches Link.
These major projects are vital to driving not only economic growth but now economic recovery due to the widespread impact of Covid 19. Delivering projects of this scale and significance demands a strong, collaborative and flexible partnership between the public and the private sector to realise not only the physical outcomes of the project but also the aggregated benefits from enhanced productivity, employment, lower travel times and improved health and education and services.
The public private partnership (PPP) model has been at the centre of these projects although the role the public and private sector has played has varied from construction, finance, delivery, and operation.
Leilani Frew, CEO of the Australian Government’s Infrastructure and Project Financing Agency believes that the key to successful PPPs is to allocate risk in terms of a shared responsibility as equal partners. That given these projects can take up to five plus years, they necessitate a risk sharing that enables a level of fluidity to accommodate changes in circumstances especially during the construction phase.
Andrew Head, CEO WestConnex, Transurban has spent decades in the infrastructure industry goes further and attributing success of PPPs is not only getting the right risk allocation to fit the project but that it is imperative that the right people come to the table in a spirit of collaboration and trust to make the project work throughout its lifecycle.
While both private and public partners seek certainty, it is in fact recognizing that a degree of uncertainty is inherent in the project, particularly during period of disruption such as pandemic, will enhance the projects likelihood of success. This collaborative flexibility has enabled Westconnex to navigate unanticipated challenges such as the impact of the current international border restrictions on access to specialised skills and talent to deliver key aspects of the project.
A shared focus on the outcomes, the vision and purpose that founded the partnership, appears to be the most significant lesson learned over the past decade of PPP infrastructure delivery. In that context the community benefits outweigh and temper other considerations and difficulties. Success also demands bringing stakeholders along the journey with honest open communications about the inevitable disruptions to their businesses and personal lives. Leilani Frew says private partners must have a high level of patience and tolerance when it comes to government making decisions, as there is naturally a different, and equally vital, set of stakeholders and expectations that needs to be met than that of the private sector. This is particularly the case where there is tripartite Government participation in infrastructure such as the second Sydney airport. As a key nation building project involving the Federal, State and seven local governments it will not only set the benchmark for the future of Sydney but for public-private collaboration.
Accommodating change and flexibility in PPPs also enables and facilitates innovation. The future needs of our changing society need to be considered more than ever now in the wake of Covid and other societal changes like digitization. In addition to the economic uplift of building infrastructure we ensure we are building appropriate infrastructure for future generations to reap the benefits.
Sydney Business Chamber held an online forum with Leilani Frew CEO, Australian Government Infrastructure and Project Financing Agency and Andrew Head CEO, WestConnex, Transurban on 31 August, 2020.
