Australia has stood at the forefront of public private partnerships (PPPs) for over four decades with a well-established framework, strong support from federal and state governments, and a robust regulatory and legal environment. Alongside our counterparts in the UK, who initiated the Project Finance Initiative (PFI) in 1992, Australia was an early adopter of PPPs dating back to the 1980s with the delivery of the Gateway Motorway and Sydney Harbour Tunnel. Since then, we have delivered over 130 PPPs¹, setting the global benchmark for collaboration between the public and private sector, sharing in the responsibility, risk, and reward of delivering new and essential infrastructure.

A market at an inflection point

Since 2001, PPP project value across Australia and New Zealand (ANZ) has totalled more than A$160 billion² — a track record that reflects four decades of hard-won expertise, institutional knowledge, and genuine delivery. But the market does not run on momentum alone. Political cycles, planning uncertainty, inflationary environments, construction cost and supply chain volatility, risk allocation disputes, labour shortages, and geopolitical shocks have all, at various points, slowed or stalled the pipeline. The PPP market is resilient — but it is not self-correcting.

It is fair to say that ANZ has been deploying PPPs at a lower volume in the past few years compared to a decade ago. This comes at a time when governments in emerging PPP markets — particularly across the Middle East and Asia — have significantly accelerated their PPP adoption to fill critical infrastructure gaps, recognising the model's ability to align public interest with private sector efficiency. Abu Dhabi's recent launch of a US$15 billion pipeline spanning 24 projects³ across transport, water and social infrastructure is a telling example — and industry observers see it as a sign of market maturity comparable to the pipeline activity that defined the UK, Australia and Canada in the 1990s and 2000s. New Zealand has also made a renewed push under its current government, prioritising infrastructure delivery under a refreshed PPP framework, restoring political certainty, and signalling a stable landscape for foreign talent and capital. Australian investors, financiers, and contractors have taken note, increasingly identifying emerging markets as high-priority destinations given their pipeline consistency and investor confidence.

Capital, talent, and institutional knowledge follow pipeline. If Australia stays too thin for too long, the ecosystem risks atrophying — and the expertise built over four decades may prove harder to rebuild than it was to lose.

In ANZ, while PPPs have delivered billions in infrastructure and local community benefits — including several instances where these projects have outperformed traditional procurement on time and cost — the PPP model has not been without its failures. High-profile disputes, cost overruns, lengthy delays, contractor insolvencies, and risk transfer that was theoretical on paper but disputed in practice, have all tested public and political confidence.

However, after years of recalibration, Australian states have updated their approach focusing on greater transparency, collaborative frameworks, risk-sharing, cost management, value for money, commercial flexibility, and community engagement. They are reengaging with PPPs – not out of ideology but out of necessity.

The infrastructure gap

The infrastructure gap in Australia and New Zealand is not a secret. Ageing assets, growing populations, constrained government budgets have been pushing the case for private investment in social and economic infrastructure for years. Infrastructure remains a critical enabler of social and economic outcomes, elevating both countries' productivity, liveability and sustainability.

Since COVID, three further infrastructure challenges have emerged that are reshaping the investment landscape. The rapid growth in demand for compute power and data centres has driven a surge in energy consumption — and transmission is emerging as the real bottleneck in Australia. The shift to distributed and remote work has elevated the importance of secondary cities, regional transport connections, supply chains, and industrial corridors. And underpinning all of it is an energy transition that demands not just the build-out of renewable energy and storage, but a fundamental rebuild of the grid itself — capable of managing variable generation, maintaining network stability, and moving power efficiently from regional areas to economic hubs.

As a result, capital allocation towards infrastructure in the next decade or two, both from the public and private sector, is more important than ever.

A market reawakening

In the 2025/26 Budget, Australian state governments allocated A$278 billion⁴ to infrastructure over the four years to FY2028-29 representing an A$8 billion increase. The Australian Federal Government also positioned itself to accelerate a A$60.7 billion infrastructure pipeline over the next four years, spanning essential assets, transport corridors, renewable energy transmission, Olympic infrastructure, and much needed social and affordable housing. To inform the Australian Government's decision making on infrastructure investment, the Infrastructure Priority List also presents Infrastructure Australia's view of the most nationally significant infrastructure priorities across the country over the next 10 years⁵.

After a relatively subdued pipeline over the past few years, last year in Australia witnessed an unprecedented amount of PPP industry market soundings which included Victoria Schools, NSW Schools and South Australia Schools, Darwin Prison, Queensland Olympic stadia and associated facilities, ACT convention centre, the potential bundling of a police headquarters in South Australia, defence accommodation in the ACT, High Speed Rail – Newcastle to Sydney, and the potential re-emergence of Parkville Hospital. There were also several live EOI and RFP processes including but not limited to Gold Coast Arena, Gabba entertainment and housing precinct, Ground Lease Model 3, Gippsland offshore wind transmission project, New England Renewable Energy Zone, VicGrid's System Strength Stage 2A Project, and the Advanced Resource Recovery Centre in the Gold Coast. Since its hiatus from 2018-2024, New Zealand also successfully ran RFP processes for Christchurch Men's Prison and the Northland Corridor.

It is worth noting that the pipeline above does not include several live PPP augmentations and the critical supply of social and affordable housing being delivered under the Housing Australia Future Fund. We are also witnessing a strategic shift by certain government departments towards a more progressive style of PPP procurement — where the public sector and private development partners are curating, structuring, and delivering projects together in a collaborative manner.

The infrastructure deficits are real. The fiscal constraints are real. And the private capital and active equity investors available to help bridge that gap in a timely manner are real. The question is no longer simply whether to use the PPP model or not. It is what kind of collaborative partnership is needed. The answers demand honesty about where the model has fallen short — and clarity about what must change. How do we turn decades of lessons learnt and redefine PPPs for a new era — restoring public, political, and investor confidence to ensure Australia's long-term prosperity.

Ten principles for partnerships that last

Ten principles emerge from decades of experience — each one a response to where the PPP model has fallen short, and a foundation for getting it right.

It would be easy to present these as new ideas. They are not. The sector has understood most of them for years. What has changed is the urgency — and the consequences of continuing to ignore them. A national PPP framework due for renewal to reflect a changing market. An acute hospital PPP ban in NSW born from a series of operational failures and a genuine tragedy⁶ — even as three hospitals being delivered in Victoria stand as some of the country's most successful PPPs, a reminder that the model itself is not the problem. An industry watching capital and talent follow pipeline to other countries. These are not abstract warning signs. They are the cost of lessons not yet fully learned.

Jump to a principle:

1. Risk transfer must be real, not just contractual
2. Active partnership doesn't end at financial close
3. Procurement must reward value, not minimise cost
4. Pipeline consistency is the precondition for a healthy market
5. Competition requires investment — from both sides
6. Community engagement is a delivery requirement, not a compliance exercise
7. Progressive and collaborative PPP procurement deserves formal recognition
8. ESG and social value must be measured, not just promised
9. Transparency must run for the entire concession
10. PPPs are a tool in the toolkit

1. Risk transfer must be real, not just contractual

Risk allocation that looks clean on paper but unravels under pressure is one of the greatest reputational liabilities for the PPP model. Across ANZ's history, the gap between contractual risk transfer and commercial reality has been the thread connecting the most damaging failures — disputes that dragged on for years, contractor insolvencies that left governments exposed despite contractual protections, and government bailouts that confirmed what communities already suspected: that the risk had never really left the public balance sheet.

The starting point is sensible allocation. Risks should be assigned to the party best placed to manage, price and control them — not politically, and not to satisfy a value-for-money assessment. Geotechnical conditions, consenting and planning approvals, utilities, design development, industrial relations, contamination, and third-party interfaces have all proven consistently difficult for the private sector to quantify and control on major ANZ projects — yet have historically been allocated to contractors with insufficient visibility over them. The result: excessive contingencies, fragile business cases, and ultimately contractor distress. Where risks cannot be reasonably quantified or controlled by the private sector, targeted risk sharing mechanisms — or collaborative contracting models embraced by some states — are a better outcome for both parties than an illusion of full transfer.

Governments and private partners must be honest at the outset about which risks the private sector can genuinely absorb over a concession — and which it cannot. Misallocating risk to chase a favourable value-for-money assessment is a short-term saving with a long-term cost. When risk transfer collapses under pressure, it takes public and political confidence with it — and that confidence, once lost, is far harder to rebuild than any individual project.

2. Active partnership doesn't end at financial close

Financial close is not the finish line. It is the starting gun.

A PPP concession runs for 25 to 35 years. The ribbon-cutting for the first day of operations typically happens three to five years in after construction. What follows — the decades of operations, maintenance, lifecycle, community initiatives, and contract management — is where the real value of the partnership is either realised or diminished. And yet, for too many projects, the investors who structured the deal have moved on long before that journey is complete.

The 'set and forget' model of PPP equity investment is one of the sector's pinch points. Investors who treat construction completion as an exit event - selling their position, reducing their governance, or leaving an under-resourced SPV to manage a complex long-term contract — are not partners but rather just financiers using a partnership structure. The difference matters enormously, and governments have become increasingly sophisticated at identifying it.

The best outcomes on PPPs have consistently come from equity investors who remain active and present for the full concession length — who resource the SPV properly, maintain continuity of personnel, engage proactively with government clients and communities, and treat emerging issues as problems to solve together rather than disputes to manage at arm's length. This is what governments mean when they ask for 'active equity' — and it is increasingly being tested, not just declared.

This has implications for how equity is selected, how SPVs are governed, and how project agreements are structured. Bid evaluation criteria should assess not just financial capacity but demonstrated commitment to long-term stewardship. SPV governance structures should require meaningful equity representation and resourcing throughout the operational phase. And equity investors should be held to the partnership standard they committed to at financial close.

Infrastructure is not a transaction. It is a relationship. The communities served by these assets deserve partners who understand the difference.

3. Procurement must reward value, not minimise cost

PPP procurement should not be a competition that rewards the most bullish promise — where optimism wins the contract and the delivery team inherits the consequences. Whilst competitive tension is important, excessive focus on the 'lowest price' leads to under-pricing, delivery risk, unfounded claims, and project failure. This dynamic has played out repeatedly across transport, health, and social infrastructure PPPs in both the UK and Australia — cost-driven tenders are producing thin margins, fragile business cases, and contractor distress.

Value for money must be assessed over the full life cycle — not just construction and financing costs, but operational quality, asset performance, user experience, and asset resilience. New Zealand's refreshed PPP framework reflects this directly. Affordability thresholds — historically set too low at the business case stage and left unchanged — are now validated at key milestones, ensuring the cost basis remains realistic and accommodating any volatility in the market as projects move from business case to financial close.

Best-in-class procurement frameworks evaluate bids on a multi-criteria basis — weighing execution certainty, technical capability, financial stability, innovation, social outcomes, and community benefits alongside price. The goal is to select the partner most likely to deliver over the life of the concession, not the one most willing to underprice to win the room. A bullish bid that collapses in delivery costs the public far more than a credible bid that costs slightly more at financial close. Lowest cost is rarely best value — and procurement frameworks that fail to make that distinction are not protecting the public interest. They are deferring its cost.

4. Pipeline consistency is the precondition for a healthy market

What sustains investor confidence, market capability, and the deep expertise that complex PPPs require is not the occasional flagship project — it is a transparent, predictable, multi-year pipeline. Abu Dhabi's recent launch of a US$15 billion program spanning 24 projects⁷ across transport, water and social infrastructure is not remarkable because of its scale alone. It is remarkable because it signals to the global market exactly what the Middle East has understood and ANZ has periodically forgotten: that pipeline consistency is how you attract and retain the best active equity, the best capital, the best contractors, and the best advisers.

Capital, talent, and institutional knowledge follow pipeline. New Zealand's seven-year hiatus between 2018 and the current government's reactivation in 2024 did not just pause the market — it exported it. The expertise, relationships, and institutional memory that make PPPs work efficiently do not sit idle waiting for the next project. They relocate. To its credit, the current New Zealand government moved decisively to reverse that trend — committing to a refreshed PPP framework, establishing the National Infrastructure Agency, and engaging international investors directly through the New Zealand Infrastructure Investment Summit to signal that the market is open for business⁸.

Governments must treat pipeline communication as a strategic responsibility — maintaining genuine market engagement between projects, publishing committed programmes with clarity, and signalling intent early enough for the private sector to build the capability required to respond.

5. Competition requires investment — from both sides

High bid costs deter competition. When only the largest, most capitalised consortia can afford to assemble the teams, fund the advisers, and sustain the timeline required to compete for a PPP, governments lose competitive tension that drives innovation, design quality, and value for money. Industry feedback from recent market engagement processes consistently identified bid cost and procurement efficiency as barriers to participation.

This is not simply a negotiation between a procuring agency and bidders. It is a market stewardship responsibility. Governments that treat bid cost reimbursement as a number to be minimised, rather than an investment in the quality and depth of the market, are undermining the very competition that justifies the PPP model. Streamlined procurement timelines, meaningful early market engagement, and genuine dialogue about scope and risk before the formal process kicks off are not industry-friendly conversations — they are the preconditions for getting the best outcome. Infrastructure New Zealand has been clear on this point in their refreshed blueprint: stipends equivalent to 65–75%⁹ of anticipated bid costs should be standard practice, as is increasingly the case in Australia, to maintain a competitive and functioning market in which bidders can invest in high-quality responses.

6. Community engagement is a delivery requirement, not a compliance exercise

Projects that treated community consultation as a box to be ticked paid for it later — in delays, legal challenges, political reversals, and reputational damage that outlasted construction. The NSW Government's decision to legislate a ban on PPPs for acute hospitals in 2025 is the starkest reminder of what happens when public trust in the model breaks down.

The lesson is not that PPPs cannot deliver health infrastructure — they clearly can and do, across Victoria and Queensland and beyond. The lesson is that community confidence is not a byproduct of a well-delivered project. It must be built deliberately, from before procurement begins, through genuine engagement that influences design and social outcomes — not engagement that is structured to validate decisions already made. When communities feel bypassed, they find ways to be heard. Increasingly, those ways involve legislation.

7. Progressive and collaborative PPP procurement deserves formal recognition

The PPP model as originally conceived placed government and the private sector on opposite sides of the table — one buying, one selling, with risk priced and transferred between them at financial close. That model served its purpose and continues to do so — and for many projects, it remains the right choice. Where the scope is well-defined, the risk profile is quantifiable, and the case for private financing is clear, a conventional PPP will deliver the best outcome.

Where a conventional PPP is not the right fit, we are starting to see a shift toward structures where government and private partners co-create projects together from the outset — curating scope, structuring risk, and making critical design decisions in partnership rather than in sequence. The progressive PPP model, which featured in Ground Lease Model 3 last year, is an early expression of this philosophy — one that shows promise but also requires further refinement as governments and the private sector continue to learn together.

The opportunity now is to formalise what is working, build on it, and refine what is not. Governments that have pioneered these models have demonstrated leadership — and the next step is to give that leadership institutional shape. A refresh of the National PPP Guidelines — last substantively updated in 2015-16 — to formally recognise and provide guidance on progressive and collaborative procurement models would be a natural starting point, allowing agencies across all states to draw on those lessons rather than reinventing the approach project by project. Consistency across states will also give the private sector the confidence to invest in the capability these structures require — deepening the market rather than fragmenting it.

8. ESG and social value must be measured, not just promised

Sustainability-linked financing has moved from exception to expectation. Across the ANZ PPP market, green and sustainability loans are now embedded in project financing structures — from Canberra Light Rail, the first Australian transport PPP to execute a green loan in 2020, to the New Melton Hospital — Victoria's first all-electric hospital — which incorporated a sustainability loan as part of its project financing at financial close in 2024. These are not isolated transactions. They mark a clear trajectory: green credentials have moved from differentiator to threshold requirement, and the PPP market has led that shift.

But environmental performance has outpaced social impact in both ambition and measurement. Too many projects still count inputs — apprenticeships committed, local suppliers engaged, community grants allocated — rather than measuring outcomes. Performance regimes have similarly become too complex and process-driven — measuring compliance with granular tasks rather than actual user and community outcomes. Procurement frameworks must embed measurable ESG and social value criteria from business case development through to ongoing contract management. Performance obligations must be real and reported against publicly. The communities that live alongside these assets for 30 years deserve nothing less.

9. Transparency must run for the entire concession

Financial close or construction completion is not the end of a PPP. It is, in many ways, the beginning of the relationship that matters most — the one between the Project Company, the government client, and the local community the asset serves. And yet, for too many projects, transparency effectively ends once contracts are signed. Performance reporting retreats. Community visibility of how the contract is tracking disappears. By the time problems surface publicly, they have often been building for years.

The highest-profile PPP failures in ANZ did not originate at procurement. They emerged in construction or operations — when delivery failures went unaddressed, when the assumptions underpinning the original risk allocation proved wrong, and when governments and communities had insufficient visibility to intervene early. Independent performance oversight, meaningful public reporting, and community feedback mechanisms must be designed into PPP contracts from the outset and maintained across the entire concession. Transparency is not a threat to commercial confidentiality — it is the foundation of the public trust that makes the next project possible.

10. PPPs are a tool in the toolkit

Not every infrastructure project is suited to a PPP. The model excels where government can clearly articulate the desired scope and objectives, where the project benefits from whole-of-life integration of design, construction and operations, where the risk profile can be assessed with reasonable certainty, where there is genuine appetite for private sector innovation, and critically — where private financing and capital genuinely at risk add value over and above what governments could deliver alone. That value is real: it brings discipline to delivery, transfers risk to those with skin in the game and frees public capital for the services that cannot be privately financed. Where those conditions are not present — where scope is fluid, risks are unquantifiable, or the project is too small to justify the transaction costs — a different model will deliver better outcomes.

There is no one-size-fits-all approach to infrastructure procurement. Governments have a broader toolkit at their disposal and the discipline to match model to project is what keeps the market credible. Where the conditions for a conventional PPP are not fully met, progressive and collaborative structures — where government and private partners co-design scope, share risk, and build the partnership from the outset rather than across a procurement table — can offer a more appropriate path. The pipeline ahead demands both.

Within the toolkit, the quality of equity matters as much as the model chosen. Active equity investors who remain engaged and well-resourced throughout the entire concession — who bring lessons learnt from other markets and treat every project as part of a longer relationship, not as a transaction that ends at financial close — are not just a commercial preference. They are a structural requirement for the model to work as intended. As is now common practice, procuring agencies should assess active equity and SPV management capability explicitly.

The risk of deploying a PPP on an unsuitable project — or with the wrong equity partner — is not just a poor outcome for that project, it is a reputational cost borne by everyone. Selectivity is not timidity; it is the discipline that keeps PPPs credible.

The opportunity and the obligation

PPPs are delivering hospitals, schools, social housing, rail, roads and energy transition projects across Australia and New Zealand that governments simply could not deliver alone. Once these projects are built and communities are thriving, it is easy to forget the complexity, the risk, and the human effort it took to get there. That invisibility is, in many ways, the model working as it should.

But there's the rub. When partnerships fall short — when risk transfer collapses under pressure, when communities feel bypassed, when contractor insolvencies expose the gap between contractual theory and commercial reality — the damage to public and political confidence is lasting and disproportionate. The failures are visible. The successes are taken for granted.

That asymmetry is precisely why getting the next era right matters so much.

The PPP model was never a silver bullet. It is a tool — one that works when it is applied with discipline, honesty, and genuine shared purpose, and fails when it is not. After a subdued pipeline in Australia and a seven-year hiatus in New Zealand, both markets are reengaging — not out of ideology, but out of inevitability. The infrastructure deficits are structural. The fiscal constraints are real. And the experienced active equity investors and private capital available to help bridge that gap are ready to be deployed.

What's required now is a generation of partnerships built on firmer foundations: risk allocation that holds under pressure, not just on paper; community engagement that begins early and means something; transparency that runs the full life of the contract, not just to financial close; and a shared commitment to outcomes that outlast the ribbon-cutting.

For many of us, this is the reason we chose infrastructure. Not the contracts or the capital structures — but the hospitals that open, the schools that fill, the transmission lines that power homes through the energy transition. The legacy is real. So is the responsibility.

The governments and private partners that embrace that responsibility — with honesty about the past and clarity about what must change — will define the next decade of infrastructure across Australia and New Zealand. The opportunity is here. The pipeline is building. The only question is whether we are ready to meet it with the standard it deserves.

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1. 2025_09_08 A legal practitioner's reflections on Australia's privately financed PPP market.pdf
2. Public Private Partnerships By Jurisdiction & Year - Infrastructure Partnerships Australia
3. Abu Dhabi moves 'from pilots to programme'
4. Australian Infrastructure Budget Monitor 2025-26 - Infrastructure Partnerships Australia
5. 2026-Infrastructure-Priority-List.pdf
6. The Health Services Amendment (PPP Prohibition) Act 2025 (NSW), known as "Joe's Law", was introduced following the tragic death of two-year-old Joe Massa at Northern Beaches Hospital in September 2024 (NSW Government Media Release). It is important to note that this ban applies only to the acute clinical services model used at Northern Beaches Hospital — not to traditional hospital PPPs, such as those delivered in Victoria, where clinical services remain with the state.
7. Abu Dhabi moves 'from pilots to programme'
8. New Zealand National Infrastructure Funding and Financing, Speech to Building Nations 2024; Deloitte New Zealand, Government Budget 2025 — Infrastructure.
9. Infrastructure New Zealand, Developing and Refining the Public Private Partnership Model and other Infrastructure Financing Tools in New Zealand, July 2024, p.17. Available at: https://infrastructure.org.nz/wp-content/uploads/2024/07/INZ-Infrastructure-Financing-Models-Document-11-July-2024.pdf