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Australian Public-Private Partnerships Benefiting from Experience Mar 07
Standard & Poors, March 2007
The recent default of Cross City Tunnel (CCT) has led to speculation about the future success of the Public-Private Partnership (PPP) model in Australia. Standard & Poor's believes that PPPs will survive CCT. However, their success is likely to depend on the degree to which the government and private sector take on board some key historical lessons. The circumstances surrounding the default of CCT and its sister projects-Sydney and Brisbane's airport rail-links-demonstrate that debt used to fund PPPs is not government-backed. Standard & Poor's believes these defaults and the construction cost issues of Melbourne's Spencer Street Station underline the nature of risk transfer in the PPP model. Investors must therefore undertake a fundamental assessment of each project's risks and have...
Companies mentioned in this report are: Australia (Commonwealth of) (Unsolicited Ratings)
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
Australia (Commonwealth of) (Unsolicited Ratings)