The Australian state of Victoria announced on 2 May 2013, significant reforms to its Public Private Partnership (PPP) policy to support infrastructure growth in the state.Under the new Policy, the state government may fund PPP projects by making partial capital contributions in two ways:

• As milestone payments during construction (eg for mega projects where the full private capital to fully finance construction cannot be raised); and/or
• As a lump sum payment once construction is complete to achieve greater value.

According to Victorian Treasurer, Michael O'Brien, the new Policy is an opportunity to optimise the amount of risk capital, effectively leveraging the lower cost of government borrowing.

To date, the state Government has proposed contributing money to the AUD630 million Bendigo Hospital, which will be built as a PPP. The Queensland Government has included a lump sum payment to be made once construction is complete on the Gold Coast Rapid Transit project.

Source: K&L Gates