Sydney Airport Link Tunnel: Public Private Partnership Procurement

This report provides an overview of the procurement process used in the Sydney Airport Link Tunnel project, focusing on the Public-Private Partnership (PPP) delivery model. It highlights the extensive use of PPPs in Australia for large-scale infrastructure projects due to the value for money achieved through risk sharing among stakeholders. The report discusses the historical context of PPPs, noting their presence since the 17th century and their resurgence in Australia due to resource constraints and increasing demands for infrastructure. It emphasizes the importance of evaluating project expenses and economic cost-benefit analysis, especially concerning modifications and the involvement of additional factors. The report also underscores the government's responsibility in ensuring the viability of the monetary model, including assessing patronage projections and operational cost estimates to determine the sufficiency of cash flows for debt obligations.

Introduction to Contracts and Procurement 1
Introduction to Contracts and Procurement
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Introduction to Contracts and Procurement 2
Sydney Airport Link Tunnel procurement Process
During the development of the Sydney Airport link tunnel the procurement process that was
applied is public private partnership (PPP) delivery model. Accordingly, the public private
partnership procurement has been extensively in use in Australia for procuring huge scale
infrastructures as well as public resources like bridges, hospitals and tunnels among other.
Therefore, Sydney airport link tunnel falls under these type of infrastructures (Newman, and
Bird, 2017, p. 71). As a result, the principle of public private partnership project is to realise
value for money for all stakeholders included in the partnership by engaging them in the in a
risk sharing relation.
According to past studies it has shown that private funding as well as operations related to
infrastructure is not a new concept. In this light, the PPP-type structures have been in
existence from as early as in the 17th century in various countries such as France, the United
States and Britain. Certainly, the primary reason for Australia as a country the unavailability
of resources particularly monetary together with the inclining demands for the provision of
infrastructural services, they are a key aspect which has driven Australia to the private sector
to avail the public with goods and services. As a result, this has led to the re-growth of the
public private partnership kind of project procurement approach. According to Jardine, and
Riley, (2017) public private partnership as a cooperative undertaking between the public and
private industry, established on the expertise of every partner excellently achieves the defined
public requirements using appropriate resource allocation, rewards as well as risks.
Therefore, the public private partnership entails two or more actors with at least one coming
from either side that the public and private sector. Accordingly, in this case each member has
the capability to bargain on for themselves and on behalf of the other thus each participant
comes with something of worth to the partnership (MacDonald, 2017, p. 10). As a result,

Introduction to Contracts and Procurement 3
public private partnership allow the sharing of risks as well as responsibilities for the results
between the involved parties.
Therefore, the public private partnership procurement process for Sydney airport link tunnel
is significant the Australian government since it find the opportunity to independently
evaluate the expense of associated with the project to figure out if it can be completely
financed privately. Indeed, the PPP process work to ensure that modifications to the scope of
the project is done through the involvement of key additional factors such as new stations
which can only happen after performing revisions to the economic cost benefit analysis
(CBA) to weigh the advantages (Infrastructureaustralia.gov.au, 2018). Similarly, the
acceptance of the private sector of the monetary risks does not completely liberate the
responsibility of the government to make sure the viability of the monetary model applied.
Thus, there benefit associated with the government completely evaluating the attainability of
the major assumptions like patronage projections as well as operational cost estimates to
determine if the cash flows are sufficient enough to service the debt obligations.

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Bibliography
Infrastructureaustralia.gov.au. (2018). [online] Available at:
https://infrastructureaustralia.gov.au/policy-publications/publications/files/
Review_of_Major_Infrastructure_Delivery_PWC.pdf [Accessed 29 Nov. 2018].
Jardine, D. and Riley, M., 2017. Tunnel vision: Optimising procurement models to deliver
successful tunnelling projects. In 16th Australasian Tunnelling Conference 2017:
Challenging Underground Space: Bigger, Better, More (p. 632). Engineers Australia.
MacDonald, C.C., 2017. Planning, design and construction of the WestConnex urban
motorway scheme-The largest road transportation tunnelling project ever undertaken in
Australia. In 16th Australasian Tunnelling Conference 2017: Challenging Underground
Space: Bigger, Better, More (p. 10). Engineers Australia.
Newman, J. and Bird, M.G., 2017. British Columbia's fast ferries and Sydney's Airport Link:
partisan barriers to learning from policy failure. Policy & Politics, 45(1), pp.71-85.