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The $1 Billion Lesson in Arrogance (that taxpayers paid for)
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Let me tell you a bedtime story. It’s about a classic PPP project. ​ However, it’s a bedtime story for the nightmares. ​ It starts in Australia. Sunshine. Kangaroos. And a bunch of brilliant bureaucrats who thought they could outsmart the laws of project finance. ​ The name? Airport Link Tunnel in Brisbane. ​ You see, they had a vision. A tunnel linking Brisbane Airport with the city. As I said… A classic PPP. ​ Except it wasn't. ​ They forecasted 135,000 vehicles per day. ​ ​ They gave a 45-year concession. ​ ​ They put most of the risk on the private sector. Well… ​ The theory of risk transfer works perfectly… until the private sector runs straight into bankruptcy court. ​ By 2013, BrisConnections, the private consortium behind it, was dead. And the cherry on top? La guinda, as we say in Spanish? ​ Meanwhile, the government shrugged: ​ ​ Yes… Yes… Exactly. ​ We keep saying PPPs are about risk transfer. ​ This wasn’t a tunnel. ​ Moral of the story? ​ Sweet dreams, my friends. ​ By the way… Want more brutal truths about PPPs, minus the buzzwords?
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Vicente Valencia
I talk about Personal Growth, Management, Infrastructure and More | 👇JOIN +2k readers 👇
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