The $1 Billion Lesson in Arrogance (that taxpayers paid for)


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.
The year? 2010.
The cost? $4.8 billion AUD.
The outcome? A flaming, billion-dollar disaster.

​

You see, they had a vision.

A tunnel linking Brisbane Airport with the city.

As I said… A classic PPP.

​

Except it wasn't.

​
Because here’s what they did:

They forecasted 135,000 vehicles per day.
Actual usage? 56,000.

​
That’s not a small miss. That’s delusion wearing a hi-vis vest.

​

They gave a 45-year concession.

​
Guess how long the private company lasted?
Two years.

​

They put most of the risk on the private sector.
Which sounds sexy in a press release, my friends working for government agencies – I know many of you read this newsletter…

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.
Equity wiped.
Investors furious.
Lawsuits flying.
Public confidence? Torched.

And the cherry on top? La guinda, as we say in Spanish?
Retail investors were lured in with aggressive marketing and promises of gold.

​
Some lost their savings.
Others tried to sue.
Many just cried.

Meanwhile, the government shrugged:
​"Not our problem. It was a private failure."

​
Except…

​
Who do you think inherited the road?

Yes…

Yes…

Exactly.

​

We keep saying PPPs are about risk transfer.

​
But what good is transferring risk if you’re handing it to people who believe PowerPoints more than traffic models?

This wasn’t a tunnel.
It was a taxpayer-funded grave for common sense.

​

Moral of the story?
When your traffic forecasts come from a wish and a prayer,
When your risk allocation is designed to impress, not to function,
And when your procurement is driven by headlines, not expertise…

​
You don’t get innovation.
You get insolvency.

Sweet dreams, my friends.

​

By the way… Want more brutal truths about PPPs, minus the buzzwords?
Click below:

$99.90

The 15 Top Lessons of a PPP Project Nightmare

Learn about:
The number 1 killer of Projects
Why this was not going to be just "another construction project, mate"... Read more

​

​

PD 1: If you liked this email, don't keep it in secret and forward it to a friend. They will thank you enormously one day.

PD 2: If somebody has sent you this email and you want to receive emails like this yourself, visit vicentevalencia.com

PD 3: If you want unsubscribe, click the link below.

​

​

Vicente Valencia

I talk about Personal Growth, Management, Infrastructure and More | C-Suite Executive | Mentor, Coach, Strategic Consultant | Real Estate Investor | 👇JOIN +2k readers 👇

Read more from Vicente Valencia

To those people that try to explain the world through their views just put this on their faces: In the USA, 76 percent of people live paycheck to paycheck, some 50 percent of Americans have no money for retirement, and 47 percent of Americans don’t have $400 for an emergency. If these statistics were true in a poor country, it would be one thing, but America is considered a wealthy country, right? Judging is a waste of time. Trying to reason about extremely complex issues based on information...

Once upon a time, there was once a hospital PPP that had every reason to implode. The private partner was a joint venture between a French construction giant, an Aussie FM firm, and a Spanish bank that hadn’t read the contract. What could get wrong? The public sector? A government department that changed name three times during procurement. Even the Independent Certifier was late to its own appointment. All the right mindset, bricks, etc. seem to be there… and of course… the damn thing...

Your wealth adventure will be complicated by a new awareness that you are short on skills. Early on, I realized how little I knew about how to connect with people, network, communicate, build rapport, and how little confidence I had. I didn’t know how to sell, market, promote, build value, negotiate, close deals, or follow up customers. I couldn’t handle disappointment and rejection and I wasn’t even dealing with money yet. ------- Grant Cardone For those that want to start your house by the...