Public private partnerships: A procurement device to manage public sector debt

Abstract

Australian governments are amongst the leading advocates of Public Private Partnerships (PPPs) as a public procurement policy. After two decades of experience, it is timely to evaluate the effectiveness of the policy. At the aggregate level, PPPs were launched to induce private participation in public infrastructures to covertly contrive the removal of visible public debt. Drawing from the social dynamic framework of interests (Broadbent & Laughlin, 2002), this paper shows that PPPs are a powerful procurement device to legitimise the social existence of the state. This article explores the experience of the first hospital (the Port Macquarie Base Hospital) and a recent toll road (the Cross City Tunnel) delivered under the Public Private Partnerships (PPPs) model in the State of New South Wales, Australia. The study shows that the policy has effectively established the market of PPPs in a variety of sectors. Lessons to be learnt from this paper include the need for policy makers to be wary of the interest that dictates the policy. Failing to take into account the interests of the community would impeach the democratic legitimacy of the state.