Risk, rewards and results: What we’ve learned from public-private partnerships

Public-private partnerships (PPPs) are a trusted, albeit somewhat controversial method of delivering infrastructure projects efficiently and effectively. In Queensland, PPPs have been used sporadically in the development of critical public infrastructure since the early 2000s and, in some cases, have showcased their potential to manage risks and deliver projects on time and within budget. As we look forward to the 2032 Olympics, understanding the role that well-designed and developed PPPs can play becomes even more crucial.

PPPs are collaborative agreements between government entities and private sector companies. Examples of PPPs include both social and economic infrastructure, such as hospitals, schools, light rail, roads, waste facilities and sporting stadiums. Essentially, private sector firms take an output specification provided by the government for public infrastructure projects and arrange the financing, design, construction and operations over a set period, with the asset usually handed back to the government after a specified time.

These partnerships leverage the expertise, efficiency, and innovation of the private sector while addressing public needs and objectives. In a PPP, the private sector typically assumes significant risks related to project delivery, such as construction, financing, and operational risks. This model allows governments to access expertise, ensuring that critical infrastructure projects are completed on time and within budget, while also providing high-quality services to the public.

Successful PPP projects in Queensland 

In Queensland, PPPs have proven to be a successful model for delivering major infrastructure projects on time. Notable examples include TAFE and school developments, the Sunshine Coast University Hospital, and the Gold Coast Light Rail.

• TAFE and school developments: Enhanced educational facilities across the state
• Sunshine Coast University Hospital: A state-of-the-art healthcare facility that serves the growing population of the Sunshine Coast
• Gold Coast Light Rail: This transformative public transport project has improved connectivity and reduced traffic congestion. It is a prime example of a well-executed PPP. Clear deadlines were set, structured risk was transferred appropriately, and delivery was ensured without penalties.

These projects highlight how PPPs can be leveraged to deliver critical public infrastructure efficiently by transferring certain risks to the private sector, especially compared to similar infrastructure procured around the same time under a traditional model.

Key lessons from past PPPs 

The most successful PPPs allocate risks to the party best placed to manage them. When structured well, this approach drives efficiency, encourages innovation, and ensures accountability. However, misalignment in risk-sharing can lead to cost overruns or delivery challenges, highlighting the need for a thoughtful and strategic approach.

Considerations for the 2032 Olympics 

As Queensland prepares for the 2032 Olympics, the role of PPPs in delivering Olympic-related infrastructure should be a key consideration. Government agencies may argue that the government can secure cheaper funding than the private sector. However, availability payments and risk transfer in a PPP model ensure locked-in delivery timelines and performance standards.

The key question is whether the risk transfer offsets the additional cost of private-sector funding. If it does, PPPs remain a valuable tool for delivering Olympic-related infrastructure on time and within budget.

How BDO can help

By outsourcing to the private sector through well-structured PPPs, Queensland can reduce delivery risks while ensuring world-class infrastructure for the 2032 Olympics.

QUT Business Leaders’ Forum Sponsor, BDO offers a breadth of specialisation that enables them to work with key stakeholders and communities to help shape infrastructure projects. Speak with BDOs project and infrastructure advisory team today to explore how PPPs can support your next major project.