Home' Future Building: The Australian Infrastructure Review : Volume 8 Number 1 Contents futurebuilding
Special purpose vehicles
and the then directors, they found common ground and kept
everybody in the room through all of those discussions.
I remember one meeting where I learnt some insults I’ve
never heard before, for which I will forever be thankful to that
particular director. Critically though, apart from that particular
instance, people didn’t get too personal. Everyone in the room
helped to drive an outcome. At the end of the day, you can’t
actually agree on a compromise and execute it with someone
unless you’re in a room together. That was a real lesson – it’s
very easy to stay out of the room, on the phone, locked up with
your lawyers, but you’re not going to get anywhere like this, and
ultimately, we’re all trying to achieve a successful outcome.
CV: Charles, you’ve been around major projects for a while.
Do you think that the higher-profile problem projects expose the
shortcomings, or the strengths of the SPV model?
CM: I don’t think that any of the higher-profile problem
projects have de-legitimised the value of the SPV and the
PPP delivery model. I think that there are a lot of examples of
projects, from the outside looking in, that have had seemingly
insurmountable issues to address. It’s when the parties engage
early, in good faith, and seek together to resolve it quickly, that
these issues don’t run on as they have in some instances.
Take Reliance Rail, for example – it was a very complicated
project that was resolved in an effective way. Ian has been part
of the Lane Cove Tunnel project, which equally had its issues
resolved. Bad project outcomes reflect more on the players
than upon the model at the end of the day.
MB: If you don’t mind me saying so, I’d say that our project
had huge amounts of negative publicity and massive cost
overruns, but it has been very successful. From the point of
view of the customer, the Victorian Government, they wanted
to buy a desalination plant for a fixed sum of money, and they
got exactly what they wanted. It is the most successful PPP the
Victorian Government has ever entered into, although neither of
the two governments since the project has been in the market
will ever admit that.
CV: Ian, you’re in a slightly different position in that you
head a government business enterprise. Did you want to talk a
little bit about the Moorebank Intermodal Company and how it’s
different to an SPV?
IH: I guess the question is, ‘Is it an SPV?’ In the PPP sense it’s
not, but it is very similar in many respects – so it’s a form of SPV.
Moorebank Intermodal is wholly owned by the
Commonwealth as a Commonwealth Government business
enterprise, meaning that it’s an arm of government, but at arm’s
length from government. It has two shareholders: the Ministers
for Infrastructure and Finance, which is a pretty typical model,
similar to the Australian Rail Track Corporation (ARTC), the
National Broadband Network (NBN) and Western Sydney
Airport Company (WSA Co.). It operates under the Public
Governance, Performance and Accountability Act 2013.
It is similar to an SPV in that it is a single-purpose vehicle
with a very clear project objective. Like most SPVs, it’s a
company under the Corporations Act, so all issues that relate to
directors’ responsibilities and duties are relevant, even though
it’s Commonwealth owned. In our case, it is very much like the
traditional PPP SPV. It’s a small organisation, structured very
similarly to the SPVs that I’ve been involved in, and has very
similar project oversight and governance roles.
If I could also pick up the point that was made previously
sure, projects do have problems, and both Lane Cove and
Reliance Rail were mentioned; however, as engineering
outcomes that met what the Government wanted in the
first place, they are sensational. Reliance Rail, in particular,
L–R: Christopher Voyce, Ian Hunt, Kim Curtain, Matt Brassington and Charles Mott
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