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? ​ 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. ​ ​ |
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PPP = Prolonged, Painful, and Pointless. But not this time. Somehow, against all odds, cultures, and acronyms… The New Royal Adelaide Hospital in South Australia didn’t just avoid disaster — it delivered. Let me break it down for you: Australia’s most expensive hospital project at the time. $2.3 billion AUD. A maze of private, public, and clinical stakeholders. 800 beds. 40 operating theatres. 100% public access. The predictions? “Too complex.” “Healthcare PPPs always end in tears.” “Get...
It’s simple. I’ve shown you how smart people can make stupid mistakes. How costly they are. How amazingly common they are. The wrong team, the wrong assumptions, the wrong risks transferred. Simple. Foreseeable. Evitable. But… You see them over, and over again. You and I as taxpayers pay the price. And if you work in infrastructure… and you are in these “saraos” (projects), you can pay an even higher price. Endless nights without sleeping, hours and hours wasted in never-ending meetings,...
Edinburgh, Scotland. Mid-2000s. A shiny new tram network was promised. Fast, green, world-class transport across the city. Greta was not born yet… but she could be smiling for ours to a project like this. The vehicle? Of course… A complex PPP scheme led by Transport Initiatives Edinburgh (TIE) with multiple contractors, including Bilfinger Berger and Siemens. Signed in 2006. Cost? £375 million. Opening date? 2011. What actually happened? Endless disputes between the public agency and the...