Case #1822.0

Partnerships Victoria: The Public Sector Comparator

Publication Date: October 04, 2006
$3.95
Current Stock:

Educator Access

A review copy of this case is available free of charge to educators and trainers. Please create an account or sign in to gain access to this material.

Permission to Reprint

Each purchase of this product entitles the buyer to one digital file and use. If you intend to distribute, teach, or share this item, you must purchase permission for each individual who will be given access. Learn more about purchasing permission to reprint.

Abstract:
The government of the State of Victoria in Australia has been a pioneer in using the private sector to provide public infrastructure through "public-private partnerships" (PPPs). Under PPP programs the government contracts with a private company not just to build a facility but to operate it over its expected life, as well. PPPs are used for "social" infrastructure such as courthouses and hospitals as well as for "economic" infrastructure such as toll roads or public transport. The Department of Treasury required that agencies pursuing a PPP demonstrate that the PPP would save money compared to traditional procurement options. But critics argued that the Treasury's guidelines for such cost comparisons were flawed. The debate raised issues about how to compare the risks assumed by the government under different procurement options and how the differences in risks should be reflected in the discount rates.

Learning Objective:
The debate raised issues about how to compare the risks assumed by the government under different procurement options and how the differences in risks should be reflected in the discount rates.

Other Details

Case Author:
Ian Davidoff
Faculty Lead:
Jose Gomez-Ibanez
Pages (incl. exhibits):
23
Setting:
Australia, New Zealand
Language:
English