The very public stoush between Sydney’s CrossCity Motorway (CCM) and the NSW Government over the Cross City Tunnel provides observers of Public Private Partnerships (PPPs) with interesting insights into the workings of these unique forms of private sector - government relationships. The Cross City Tunnel conflict highlights the significance that formal contracts can have when a PPP goes awry. PPP contracts do not just codify who is responsible for what and how risk and rewards will be shared they also act as an important safety mechanism when the relationship between partners breaks down. Research I have conducted in both Australia and the United Kingdom suggests that when and how a legal contract will be used in the context of a PPP is often influenced by the nature of the personal relationships between key players. It is interesting to speculate whether CCM and the NSW Government would be heading to the courts if the relationship between NSW Premier Morris Iemma and CCM chief Graeme Mulligan had not degenerated to the level of personal attack and counterattack . This paper examines the issue of PPP contracts. Specifically the paper considers the process of negotiating PPP contracts and the relative positions of both the government and private sector parties at the bargaining table. The paper also comments on how legal contracts can be regarded by those responsible for the day to day management of a PPP and how a contract’s performance can be influenced by the nature of personal relationships between key individuals.
This article was originally published as Noble, GI, The role of contracts in public private partnerships, UNSW Law Journal, 29(3), 2006, 276-281.