Public–private partnerships (PPPs) have become increasingly common in government infrastructure programs around the world. An article in the Australian Journal of Public Administration examines the reasons for governments to use PPPs and tests these with former ministers and political advisers in Australian governments. The study finds politicians and their advisers generally believe PPPs have a range of advantages relative to traditional infrastructure procurement models and there is qualitative evidence for political benefits.
About PPPs
Although PPP models vary, they typically involve a private consortium undertaking project design, finance, construction, and operation of public infrastructure before ownership transfers back to government. This is typically after 25–30 years. Advocates have argued that PPPs offer advantages to governments when compared to so-called traditional procurement.
These include:
- superior value for money (VFM) delivery and operation
- better on-time and on-budget delivery
- improved risk allocation between public and private parties
- ability to defer capital payment and spread maintenance costs
- innovative outcomes in design, delivery, and operation
- the ability to shift blame and take credit as it suits them.
The PPP debate
Within the literature, clear evidence of the benefits of PPPs is scant and the debate between advocates and detractors continues. Scholars have noted that there is a lack of quantifiable evidence of the merits of PPPs compared to their alternative. Several scholars have argued that governments may have had ulterior motives to use PPPs, suggesting their use can be attributed to political benefits that governments obtain from employing them.
These have included:
- PPPs symbolically improve the government’s economic and financial credentials
- governments benefit from being seen to adopt innovative infrastructure delivery mechanisms
- governments benefit from infrastructure with immediate usability and deferred payment
- PPPs can be used to satisfy multiple constituencies with different and/or overlapping interests.
About the research
The research involved a study of Australian ministers and their advisers into the rationales for PPPs. It identified 45 reasons and tested these with politicians and their advisers for their levels of agreement.
There were 23 respondents in the ministers’ group who had served either as a:
- first minister (premier/chief minister/prime minister)
- finance portfolio minister (treasurer, assistant treasurer, finance minister)
- minister with infrastructure delivery responsibilities (e.g. minister for health, minister for corrections, minister for state development).
All had carriage of government infrastructure delivery and/or policy. A minimum of two respondents from this group were sourced from each state/territory. Advisers in the study numbered 87 and all have current or previous experience as a political adviser with infrastructure policy or delivery experience.
What the research found
Fourteen reasons for the use of PPPs attracted the highest response levels, including:
- better VFM for taxpayers
- greater efficiency which can lead to redeployment of funds for other government objectives
- defer major infrastructure costs through leasing it
- release scarce public funds which would otherwise be tied up in capital investments
- enable the full life cycle costs of infrastructure to be provided
- avoid public sector borrowing restraints
- allow greater project innovation
- place risk with party ‘best able’ to manage it.
Combined with qualitative data from interviews, these results appear to confirm that politicians have a high degree of faith in the PPP model. Respondents see PPPs as a superior delivery mechanism with several intrinsic technical benefits. In so doing, they recognise the utility of PPPs for addressing a range of infrastructure governance issues faced by governments.
The political benefits of PPPs
Just 7.27 per cent of respondents selected political benefits as a rationale for the use of PPPs. In interviews, respondents did not believe that there was a direct electoral benefit to the use of the PPP model and forcefully rejected any notion that there was. On the other hand, many of the rationales articulated in this study were inherently complementary, overlapping, and related. They had multiple potential benefits, straddling policy and political outcomes.
Notable was strong benefit that politicians and their advisers saw in PPPs as a way to reduce project risk, with its obvious attendant political advantages. Several interview respondents also said their public commitment to PPPs had offered their party’s election campaigns a symbolic benefit which had been a part of their successful election to government. This apparent symbolic advantage suggests there is a political benefit to the PPP model, even if it is less obvious than other characteristics.
The bottom line
Based on the research study, most ministers and their advisers believe that the PPP model offers several technical advantages to governments when compared to so-called traditional procurement alternatives. Key themes emerge around capital management strategies, the presentation of public sector balance sheets, the ability to bring forward delivery of public infrastructure, project management benefits, risk management benefits, perceived VFM, efficiency and innovation.
Respondents generally rejected the notion that government use of PPPs was driven by political benefits. However, the study revealed that the PPP model was viewed as bringing a range of indirect advantages to the governments by way of risk management, governance, and symbolic presentation.
Want to read more?
Why do politicians employ public–private partnerships? Results from a mixed-method study – Sebastian Zwalf, Australian Journal of Public Administration, March 2025
Each fortnight The Bridge summarises a piece of academic research relevant to public sector managers.
Another Research Brief covering PPPs is:
- Published Date: 8 April 2025