Home' Future Building: The Australian Infrastructure Review : Volume 8 Number 1 Contents futurebuilding 79
Special purpose vehicles
return that they signed up for. That’s our challenge, and it’s not
always that easy.
Kim Curtain (KC): SPVs don’t hold all the risk. Government
still holds some of that risk, and other parts of it are passed
down to subcontractors – it doesn’t all sit with the SPV; however,
it’s good to hear this sort of language being used because it’s
exactly what we’re looking for. We’re looking for an active SPV
that’s actually going to be there as a partner and work with us to
achieve the outcomes we’re looking for.
Ian Hunt (IH): Matt hit the nail on the head. What’s
interesting is that through the complex bidding processes,
expectations are very well understood from the start. They’re
all thrashed out in documents that rise a metre off the floor. It’s
the SPV’s role to make sure that everybody does what they’ve
agreed to do in those documents. In the early days of a project, I
think that’s pretty easy, as people are still around and remember
what they intended. As time goes by, however, things change,
people forget, people move on or circumstances change, and I
think that’s where the SPV comes into its own.
CV: Looking at the delivery phase of these projects, what
are some of the challenges in managing the interface between
government, clients, the design and construction (D&C)
contractor, and the operator, as part of your role in the SPV?
CM: There are multiple dimensions to that question. One
of the challenges is to not be crowded out by the necessary-
but-voluminous documentation and administration of these
projects. They’re very refined and that’s a necessary part of the
process, but it’s a danger to let that become the substitute for
real engagement, dialogue and identification of issues.
MB: I’d endorse that. It is also about making sure that
everybody focuses on the detail, because you’ve got to actually
deliver exactly what is intended, but also ensure that everyone
is looking at the big picture. That is because, as organisations,
some of us will be there for 30 years, so if you get into a stoush
with someone early on, you’ve got to remember that, actually,
you’re going to be ‘living together’ for another 25 years. It’s a
bit like a marriage, and you’ve got to communicate, be flexible,
and understand where people are coming from. Sometimes,
you have to imagine yourself on the other side of the table,
asking yourself whether you’d take the same approach they
have. You’ve got to facilitate an outcome, otherwise it will be an
KC: I agree, and that’s around the point I wanted to make as
well, which is that we’re really here to talk about partnerships.
This is the Partnerships conference, and it’s not a word I use
lightly. The third ‘P’ in PPP is there for a reason, and I think it’s
sometimes forgotten. We need to recognise that we’ve all got
different perspectives; we’re there for different purposes, and
we need to understand each other. It’s important that during
good times we develop those relationships – as Matt said, it’s
‘like a marriage’ – so that when times are harder, we have those
relationships that have been built up and developed to hold us
IH: I agree totally, and that is the key – you can make this
as easy or as hard as you like. I think it’s the subtle difference
between delivering on the project objectives and simply
administering the contract. It’s very easy to get into that bad
spiral of correspondence that is just administering the contract –
saying, ‘This clause says this’ and ‘This clause says that’ – that
you lose sight of the thing we need to deliver. I’ve been on both
sides of that, and I can tell you that one side’s enjoyable and
the other’s not.
CV: Kim, you live and breathe the management of projects,
meaning SPVs are a big part of your life. From a government
client perspective, what issues have you experienced, dealing
with all these PPPs and asset companies?
KC: There are a variety of them. We’ve got some sectors
that are very well developed, where only 20 years ago that
industry would have had an SPV that was very different. Then
there are some sectors that are new to the game and are
still going through that evolution; however, government has
improved in terms of the way we work together. It’s important to
remember that it’s not all on the SPV; governments need to be
a good counterparty, as well.
Evidence of this is in successful projects where you’ve got
an SPV that is active, engaged and working for the desired
outcomes, with an engaged government, contract manager and
contract team. We’ve come a long way, but there’s more work
we can do on the government side – that’s an area where we’ll
continue to improve.
CV: Matt, your desalination plant had its share of complexities
during delivery. How well was Aquasure equipped to deal with
MB: There are a few people in the room who were involved
more actively than I was, but I’m confident in saying that from
Aquasure’s perspective, we were very well resourced and had
some very able people.
Critically, we had a number of individuals who would not
take no for an answer. I say that because we could easily have
let the whole stoush just keep on running and end up in court.
All that would have done is end in a massive wealth transfer to a
bunch of QCs and lawyers. There was a fair bit of that as it was,
but in reality, we had a number of people who wouldn’t take no
for an answer.
We eventually drove an outcome and got a settlement.
This outcome came from people in the SPV, a huge number of
people outside in the joint ventures, and because of our board.
We did have nearly 30 per cent of our equity held by, effectively,
‘the enemy’ – the D&C contractor – during that process. To
the credit of all people involved, particularly the then chairman
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