Home' Future Building: The Australian Infrastructure Review : Volume 3 Number 1 Contents futurebuilding 57
Volume 3 Number 1
PPPs in good health
Western Australia is the exception to this trend.
Joondalup Health Campus in Perth's northern
suburbs is a full-service PPP, and is widely considered
to be one of the nation's best examples of a successful
The Western Australian Government pays private
operator Ramsay Health to maintain and run the
facility, which was initially administered under a
'design, build, nance and operate' model.
Joondalup sees the government pay availability
charges to the private operator, in return for the
delivery of all health services over the 20-year
The operator provides emergency and all other
healthcare services, and assumes the risk associated
with the provision of complex health outcomes.
Since opening in 1998, Joondalup has consistently
delivered excellent outcomes for patients -- and at a
substantially lower cost than comparable publicly
The success of Joondalup has seen a renewed
focus on full-service PPPs in Western Australia, with
the Midland Health Campus -- a new hospital to
replace the ageing Swan District hospital -- recently
awarded under a full-service PPP contract to a
consortium led by St John of God.
Dr David Russell-Weisz, Chief Executive Of cer
of Western Australia's North Metropolitan Area
Health Service, says the reason PPPs are popular is
because of the strong outcomes they produce for
patients and taxpayers.
'PPPs are offering good value for money at least at
the same level if not a better level for patients in the
community,' Russell-Weisz says.
A 2007 study undertaken by Infrastructure
Partnerships Australia on the comparative outcomes
of PPPs versus traditionally delivered projects found
that Australia's governments can expect to save
around 30 per cent when they use a PPP compared
to traditional procurement models, because of the
competitive tension and risk transfer imparted by the
With maintenance and renewal locked in for the
economic life of the hospital, health administrators,
doctors and nurses are free to focus on clinical care
and better health outcomes, while the private sector
is responsible for complex asset management and
ancillary services that support clinicians.
Involving the long-term service providers in the
early stages of the project, including through the
competitive bid process, helps to ensure a focus on
the asset's whole of life, and results in a facility that is
more t for purpose.
Russell-Weisz says full-service PPPs have been
shown to drive cost ef ciencies and better patient
outcomes. The solution, he says, is attention to detail,
good communication and transparency.
'There is no reason it can't work in eastern states,'
'We've pursued full-service PPPs dating back
to 1998. Western Australia has had signi cant
experience with PPPs.'
Russell-Weisz said contracts were nalised with
St John of God for the Midland Health Campus on
The North Metropolitan Area Health Service
established several speci cation project teams to
establish performance benchmarks and appropriate
These included a pricing team and an infrastructure
team, as well as legal and communications teams,
'You need to get the right procurement analysis
and get the right project teams in advance,' he says.
'These projects take time.'
The key to success, according to Russell-Weisz, is
to agree to a contract early in the life of the project,
with an administrator overseeing both maintenance
and clinical service. That provides the incentive
to nd cost ef ciencies and improved service for
'A full-service PPP is easier to contract and
manage than one that's half and half,' Russell-Weisz
Health Campus Façade
Health Campus, June
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