Rudman on Electrification and PPPs

Brian Rudman comments on the Minister of Transport’s decision to investigate a public private partnership for electrified trains, and finds that Sydney’s example may not be one to follow:

That contract is running months behind deadline and the New South Wales Premier is very grumpy. The Sydney tender process proper started in August 2004, presumably after months of intricate, contract design work. The successful consortium was finally announced in November 2006.

Hailed as Australia’s biggest PPP scheme, the Reliance Rail consortium agreed to deliver 626 carriages within six years, the first to start appearing in 2010. The deal included a 30-year maintenance contract. The NSW Government says it’s worth $3.6 billion, however the Sydney Morning Herald last month calculated the true figure, once financing costs and the bill for maintenance over 30 years are included, at $9.5 billion. Nearly a third of that figure will go in interest payments and the like.

The full article here is well worth a read.  I’ve also resurrected an article from way back in 2002 by John Shaw, former board member of Transit, on the folly of public private partnerships.

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