There seems to be a growing consensus that project owners are transferring too much risk to their supply chain, and that whilst project owners may achieve a cheap price for this risk transfer at the time of contract award, the longer-term outcomes are sub-optimal for all concerned, including owners.

This article considers some new risk sharing models for privately financed projects.

The term “Public Private Partnership” is a bit of a misnomer. Under Australian law, a partnership arises when two or more people agree to carry on a business in common, with a view to profit. Each partner shares in the risks and rewards of the business, is entitled to a share of the net profits of the business, and is jointly and severally liable for the liabilities and obligations of the business. Australian PPPs don’t actually embody any of these key features of a true partnership.

Can a privately finance PPP be combined with an alliance style risk allocation?

Below are some suggestions on how the NSW Government could adjust its PPP policy and pro-forma PPP contract to give affect to the aspirations of its 10 Point Plan for the construction industry.