Infratil commits A$100 million to Australian social PPPs
- Australia Social Infrastructure Partners (ASIP)
Infratil last Friday announced an intention to commit A$100 million to pursue greenfield availability based public-private partnership (PPP) opportunities in Australia via the Australia Social Infrastructure Partners (ASIP) platform. The ASIP platform consists of two vehicles managed by H.R.L. Morrison & Co.; Leighton Contractors Infrastructure Partners and Public Infrastructure Partners Australia, established in 2012.
ASIP has currently invested in 9.95% and 49.9% respectively of the equity in the A$1.85 billion New Royal Adelaide Hospital PPP and the A$232 million South East Queensland Schools PPP.
Infratil Chief Executive, Marko Bogoievski commented:
"Infratil has been assessing the Australian PPP market for some time, and in particular the best access point to pursue the significant pipeline of development opportunities that exists across the education, health and transport sectors. Infratil has observed that greenfield PPP investments offer risk-adjusted development returns that are comparable to the returns available in adjacent infrastructure sectors such as greenfield Australian wind projects."
The commitment establishes a new strategic alliance between Infratil and Leighton Contractors, one of Australia's leading contracting and project development groups, with over $13 billion work in hand.
Under the alliance arrangements between H.R.L. Morrison & Co and Leighton Contractors, Infratil and other institutional investors have the opportunity to participate as equity investors in future Leighton Contractors' PPP projects via the Leighton Contractors Infrastructure Partners vehicle. The terms of the strategic alliance allow for additional co-investment by Infratil in Leighton Contractors' PPP projects and also provides the flexibility to pursue greenfield projects where Leighton Contractors is not involved.
Leighton Contractors is currently participating in bids for the Queensland Schools, North-West Rail (NSW) and East-West Link (Victoria) availability-based PPP projects, and is well placed to succeed in bids for A$30 billion of PPP projects to be procured by state and federal governments in the near to medium term.
Infratil's commitment in the strategic alliance is to be formalised before year end, with Infratil's capital commitment likely to be called over a 2-3 year period as bids are awarded.