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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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