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The Forum > Article Comments > Evaluating public private partnerships > Comments

Evaluating public private partnerships : Comments

By Tom Richman, published 17/10/2005

Tom Richman asks if using a Public Private Partnership to finance the road infrastructure provides value for money.

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I think the most important thing to remember about PPPs is that there is no such thing as a free lunch. Regardless of who builds the infrastructure, it is we taxpayers who fund it - either through our government taxes, or through private taxes (also known as tolls or fees).

Its not possible to generalise, but all too often I think we get the following situation; A piece of infrastructure (lets say a cross city tunnel) costs $X to build, we can have our inept state government build it for $2X, or our highly efficient private sector build it for $X but then charge us $3X to use it. Whilst I hate inefficiency, at least the government is answerable to some extent to the taxpayers, whereas the private sector is answerable to its shareholders.

From the taxpayers viewpoint the private sector can turn out to be more inefficient than the government if it uses its monopoly to gouge taxpayers.
Posted by AndrewM, Monday, 17 October 2005 11:03:10 PM
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I cannot speak for other States but here in NSW the excessive use of private tollways is destroying public confidence in the capacity of Government to protect the interests of road users. The undercity tunnel has destroyed surrounding suburbs by road closures and slow light phases in an attempt to channel users into the expensive 2 kilometer tunnel. My daughter uses the tunnell 4 times a day for 5 days, it saves her time to take her son to school, but I wonder if she has seen the bill for a months use? I say about $436.80 p/m for 56 kilometers of undercity travel.

Because of poor use by motorists Sydney has been given a three weeks free period of our undercity bypass. Only 4,000 - 6,000 cars were using it daily during working days and 1,500 -2,000 weekends paying a toll of $3.90. So on a good day they were only making $24,000. The State Government stepped in to give the public a three week free period in exchange for [I believe] $150,000,000 to the tunnell consortium.

Because roads are a public assett petrol taxes and registrations should have been used to fund them as well as the State borrowing against a toll rather than give huge profits to private individuals. The road users of Sydney are loosing the free access to travel in Sydney.
Posted by Philo, Tuesday, 18 October 2005 12:09:50 AM
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