How are PPPs faring? Not too bad, thanks very much

Health PPPs: ripe for the mature markets?

Amongst so many -often justified and valid- fears expressed regarding the use of complex contractual arrangements in the health sector, the dominant one is that public health authorities may not always be in the driver’s seat of the public-private partnership they contract.

Do PPPs in mature markets such as Australia tell of different story, given the stability and steady growth of this segment which yields demonstrated quality performance and solid returns on investment?

Not necessarily. It is the same story, only perhaps the other side of the coin: Australian public authorities do have the capacity to enter into long-term and complex capital investment projects; they do have the knowledge and experience of PPPs; and they do have the support of strong regulations, guidelines and good practices to help them make the best of their PPPs.

This is why this solution was chosen for the Flinders University Health and Medical Research Building. As reported in Projects Bulletin, this AUD 255 million project will allow a special purpose vehicle (HMRB1) led by Amber Infrastructure and Tetris Capital to deliver:

“The new building that will co-locate research, clinical and technological platform for the university”. With an injection of $17million equity from Amber, this 25-year lease also includes an often overlooked hand-back arrangement with the university.

Debt is provided by National Australia Bank, enabling a swift delivery of the infrastructure. As you know at Decide we like to provide you with much more than the information anyone can pick from the tender document. We will make sure we follow the steps of the Flinders project!

Oh, and we apologise to our friends from South Australia: the illustrative picture, which depicts the beauty of this amazing country, is actually from Lakes Entrance, Vic. If anyone from SA wants to propose one from their side of Australia, we’d be happy to update this news!