PPP has never been more necessary

The average delay during the same period was 2.6 per cent of PPPs compared with 25.9 per cent for traditional contracts.

In calculating the cost to government of building infrastructure, it's also important to understand it includes more than the capital cost.

It includes the maintenance and operation of the asset over its useful life -- which can account for anywhere up to 90 per cent of the total whole of life asset cost. Governments must take these costs into account when measuring the value for money of private sector bids against the costs to government of undertaking an infrastructure project. Any other comparative costs analyses should also do so.

The WSROC report is somewhat dismissive of PPPs, describing them as offering a "boutique" solution to building infrastructure. But the value of PPPs should not be underestimated. Australia is acknowledged as a mature PPP market and the players in it have a wealth of experience in the timely delivery of quality, innovative and technically superior infrastructure over the long term. PPPs may have some shortcomings but the failure of a few recent PPPs to meet the expectations of investors and the private sector operators should not be reason to dismiss them as a failure.

There have been many more successes than failures. And, importantly, those which have not delivered the return on investment that investors expected are still providing services to governments and the public as they were intended.

Instead of arguing over the merits of the PPP as a delivery model, the starting point for any discussion on how to meet Australia's infrastructure needs should be this: an acknowledgment that Australia will need large amounts of both public and private investment to rectify our infrastructure deficit.

We need to look at ways in which governments can harness the private sector's experience, innovative approach and efficiencies, through infrastructure project models that incentivise the private sector to generate upside returns and allow the public sector to provide capital that can share in those potential returns.

Profit-sharing arrangements could allay the concerns of the critics that the private sector is taking excessive profits from infrastructure projects at the expense of the public purse.

Long-term strategic planning is essential if we are to build the infrastructure needed to sustain Australia's economic wellbeing well into the future.

At a time when our infrastructure spending needs are so high, the challenges wrought by nature so great, and governments budgets are under pressure as we emerge from the global financial crisis, it is important that this planning process looks critically at the ways to access private sector participation and capital.

It is equally important that governments recognise the need to manage public perceptions of the role of the private sector in developing our infrastructure for the future.

Brad Vann is a partner in the major projects practice at Clayton Utz