There was an interesting report in Monday’s Fin (subscription required) showing how little hope there is for a coherent policy on Public-Private Partnerships. Over the past few years, all the state governments including Queensland’s, have produced impressive-looking policy documents saying that the idea of PPPs is to get reduce the cost of public projects (‘value for money’ is the key slogan) through efficiently sharing risk with the private sector. The documents are notable for denying that the idea is fund projects that would not go ahead otherwise, or that PPPs provide a way of getting infrastructure without debt.

But, as the Fin reports, the potential private partners have other ideas. They don’t want to take on risk and they don’t want the government to worry too much about saving money. What they want, it’s pretty clear, is private-sector rates of return on public projects, with the government ready to pick up the pieces if anything goes wrong.

The president of the Infrastructure Association of Queensland, John McEvoy, has accused the Beattie government of considering only projects with major risks for potential public-private partnerships (PPPs).

Amid industry unrest over the slow pace of $3 billion of PPPs in Queensland, Mr McEvoy said there was a view held by many in the private sector that the state government was “scared” of sharing major infrastructure projects.

“I think there is a great deal of fear amongst bureaucrats about PPPs. It seems the ones you want to feed out to the private sector are risky ones,” Mr McEvoy told a PPP working group at Parliament House.

“There seems to be a perception that there is a lot of hungry people in the private sector who want to take on a lot of risk. We’re not here to be slugged with huge risks, but to deliver core government projects.”

The meeting of 80 people involved in the bidding for 16 potential PPP projects was told that industry was concerned about the mixed messages they were getting from the government.

One participant said the government had adopted a “toe in the water” approach rather than being fully committed to partnerships with the private sector.

State Development Minister Tony McGrady denied the forum was to “smooth the water” with industry after comments by Premier Peter Beattie and Treasurer Terry Mackenroth about private sector companies taking advantage of the potential profits to be made from PPPs.

There has also been unrest over delays in the tender for the first PPP, the $200 million Southbank Tafe redevelopment.

“Maybe we were a little bit conservative and cautious with the first one and wanting too many details,” Mr McGrady told The Australian Financial Review.

“But the philosophy of PPPs is alive and well in the Queensland government. It’s a win-win situation for both the private and public sector, as well as the taxpayer.”

The Queensland president of the Urban Development Institute of Australia, Peter Sherrie, told the forum the government should use PPPs to accelerate major infrastructure projects, not just save money.

“People would much rather have the infrastructure than not have it at all,” Mr Sherrie said.

The problem in all of this is that only a small minority of projects are suitable for PPP. Contrary to Mr McGraddy, most PPP arrangements have produced a winner (usually, but not always the private contractor) and a loser (usually the public, either as taxpayers or as service users).