6.7 Private Sector Investment and Public Private Partnerships It is expected that a development of this scale will only happen if it can involve a significant
such as buildings, common user facilities etc. Concessions are generally awarded on a leasehold basis for 20 to 50 years (plus option) to justify the private sector investment and may include the rehabilitation or construction of infrastructure by the concessionaire. Concessions enable governments to retain ultimate ownership of the land, control over operations on the land, as well as safeguarding public interests. At the same time, they relieve governments of the substantial operational risks and financial burdens. Private investments tend to range from minimum stakes of 20% through to full financing, depending on the host country. There is usually significant legal complexity associated with PPPs, as a number of operational issues and procedures are involved, requiring an understanding of local conditions by the private sector however these issues are justified by the long terms benefits. Therefore, if the industrial park is developed under a PPP model, the Government may need to conduct a comprehensive review of the legal and regulatory framework governing the port sector in order to determine whether amendments to existing laws may be necessary or whether new legislation is required. Achieving efficiency gains, a key objective of PPPs, depends on how risks and responsibilities are transferred between the public sector to the private sector, according to the principle that risks should be borne by the party best able to manage them. Detailed risk analysis and appropriate risk allocation between the public and private sectors are paramount to achieving a win-win partnership for both parties. The Perth Airport model is another example of a PPP. The Government owns the land, with all land and operations being regulated by the Airports Act. This could be a suitable model for the WTC as superannuation funds manage the facilities and contribute capital. The investors ensure companies have their own facilities to ensure vertical integration. The superfunds are incentivised to maximise throughput, which is required at the WTC as well. Although this SWOT analysis has been primarily focused on the WTC, there exists opportunities to replicate these processes across other strategic industrial areas identified by the state as well as their ports for Lithium Valley to expand state-wide.
amount of investment from the private sector. Most projects will involve private sector investment and potentially a portion of government land and there is likely to be several opportunities to engage in Public Private Partnerships (PPP). This is not only true for the New Energy metals sector but also the development of the new port at Kwinana and any access routes that may be needed. In recent years PPPs have emerged as the preferred model to harness greater private investment participation in infrastructure development and most importantly, to access specialised skills, innovation, new technologies associated with infrastructure development, operations and maintenance. The increasing technical, systems and financial demands have been driven by the increasingly prominent role of the private sector, both as a source of finance and provider of services required for the successful operation of ports. This has had an impact on ownership and operating structures. Well known examples of PPPs in WA are the Fremantle container terminal and the AMC, where the State Government is the ‘landlord’ and private companies are the stevedores or industrial park management. This landlord model approach is widely recognised as being an effective method of managing port operations or industrial parks around the world. Different management structures are used worldwide, but in the majority of large and medium sized industrial parks the landlord port model is used. For instance, 85–90% of global ports are landlord ports, which account for about 65–70% of global container port throughput. In this model, management responsibilities are delegated to the private sector, while the title in the land and assets remains with the Government. These industrial parks benefit from the operational expertise of the private terminal operators, experience of staff, and access to capital, systems, processes and customers. In a typical landlord model, the Government or State-owned body owns and manages the land and basic infrastructure, including common facilities such as roads, transmission lines, water pipelines etc. The private sector usually has a term concession and is responsible for industrial park operations and related investments
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