Publication Date

Winter 8-1-2012


The trend by governments to procure infrastructure using Private Sector Financing Initiatives (PFIs) has produced a number of variants such as Alliance Contracting and Public Private Partnerships (PPPs) which are now in common use in Australia. The partnership trend has developed due to unprecedented and extraordinary demands on public funding to upgrade existing infrastructure and to provide new infrastructure. Initially social infrastructure did not appear to be a good PFI prospect primarily because Governments found it unpalatable to shift costs to users.

Recently however, social infrastructure has become more attractive due to cost reductions brought about by risk transfer and whole-of-life value management. There has been a shift towards the use of PPPs to deliver hospitals, schools and prisons.

In May 2005, after four years of deliberation, the Queensland Government took its first PFI steps procuring the $240m Southbank Education and Training Precinct (SETP) as a PPP.

This drawn out process was perceived to be linked to the Queensland Government’s reluctance to engage with PPPs. In 10 years of decision making only two projects, the SETP and the Queensland Schools Project (QSP) have reached completion. Both are social infrastructure projects from the education sector.