Australian Involvement in Public Private Partnerships in the Asia-pacific Region

The Asia-Pacific region first introduced public private partnerships (‘PPPs’) in the mid 1990s. These were isolated transactions often negotiated from unsolicited bids and the results were mixed – few projects survived in their original form and many either failed or were renegotiated. Early PPPs were encouraged by national governments and development agencies as a substitute for scarce state capital. They aimed to expand the pool of infrastructure capital, improve the efficiency of utilities and extend the reach of markets into non-core public service delivery. Many PPPs required state guarantees, output-based subsidies and other forms of fiscal support.1 Early PPPs in Malaysia, Indonesia and Hong Kong were ‘build, own, operate and transfer’ (‘BOOT’) transactions for the construction of tollways. In subsequent years, franchises were used for other transport assets such as ports and railways, and pilot projects in the health sector. The region is now experiencing a second wave of interest in PPPs and many countries have introduced new PPP guidelines including China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand. In contrast with the 1990s, however, the objectives of contemporary PPP programs are different. There is a focus on private sector expertise and efficiency in the operation of networked infrastructure and lower cost procurement. The challenge facing Asian governments is to learn from past mistakes and address the structural adjustments that are necessary to achieve best practice standards and deliver value for money (‘VFM’) outcomes similar to the levels being achieved in developed economies. Australia has been successfully engaged in the Asia-Pacific for over 30 years providing development assistance, contracting and a variety of professional