Using relationship-based procurement for the provision of infrastructure

The last two decades has seen the evolution of Relational Contracting methods, such as Public Private Partnerships (PPPs), as alternative procurement approaches to traditional methods of delivering public infrastructure. Competing demands for public sector investment for new infrastructure has prompted Australian governments to increasingly turn to the private sector to form partnerships in the finance, design, construction, ownership and operation of infrastructure assets. This has become a major challenge but the emergence of PPPs provides an alternate means for developing infrastructure using private sector expertise. There is considerable growth potential for PPPs given that the New South Wales Government has developed policies to expand the application of PPPs to include social infrastructure, such as healthcare and schools. A key argument for all levels of Government (Federal, State and Local) to procure projects using PPPs is that the process would deliver better overall value for all the stakeholders. The aim of this paper is to investigate current approaches to successful risk management of infrastructure using the Top Ryde mixed-use PPP project as a case study. Top Ryde was one of the first and largest PPPs in NSW where the main public sector entity was Local Government (i.e. Council) as opposed to State Government). This involves an analysis of project documentation and a semi-structured interview process with key project stakeholders from both the public and private sectors. The results of this research centres around an effective tri-partite contract agreement, innovative relationship management and a very successful risk management approach with a particular focus on legal, financial and community factors.