A PPP stands for Public Private Partnership in which a government initiated project is funded, constructed and maintained by private sector companies in partnership with the public sector agency.
Public Private Partnerships have been pivotal in the development of social and economic infrastructure in Australia delivering value for money and improved efficiencies over the life of the many different assets.
A Public Private Partnership
A PPP involves a contract between a public sector authority and a private party, in which the private party assumes substantial financial, technical and operational risk in the project.
Typically, a private sector consortium forms a special purpose company known as a Special Purpose Vehicle (SPV) to finance, design, build, maintain and operate the asset for the contracted period. It is the SPV that signs the contract with the government and subcontracts the construction to a builder and the maintenance to a facility management company.
The new Royal Adelaide Hospital will be delivered under a PPP contracting arrangement whereby SA Health Partnership (SAHP) as a Special Purpose Vehicle (SPV):
- Provides private finance including both debt and equity for the cost of delivering the project including both debt and equity.
- Takes responsibility for the design and construction of the new hospital with a subcontract to Hansen Yuncken and Leighton Contractors.
- Has a long-term contract to provide non clinical services and maintain the infrastructure with a subcontract to Spotless.
- Has a long term contract to provide support and maintenance for the information and communication technology with a subcontract to Hewlett Packard.