Australian Public-Private Partnerships Benefiting from Experience Mar 07

Standard & Poors, March 2007

Abstract
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)

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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)

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