Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.3/5868

Title

Can good legislation be overregulation for public private partnerships?

Author(s)

Aspin, Ron

Abstract

Recent reviews of those sections of local government Acts in NSW and Victoria that regulate public-private partnerships and entrepreneurial activities, respectively, have been carried out largely in response to the failure of some projects that have cost their local communities dearly. While such reviews could be said to be overdue considering the State’s ongoing encouragement of entrepreneurial activity that include the private sector, any legislation that adds to regulatory requirements is a double edged sword. The aim of the legislation is to regulate to some degree local government’s engagement with the private sector to ensure they remain fully accountable and exercise good governance on behalf of their constituency and this is underpinned by the need to minimise risk. On the other hand, any legislation that requires added stages of reporting, accountability or possible intervention by the state could be perceived as increasing the risk to a major project thus undermining its good intent. This paper starts with a review of the political environment that encouraged councils to exercise a more entrepreneurial outlook but to do so from a business-like approach with the aim of utilising the private sector wherever possible to supply and/or finance a majority of services, utilities and infrastructure. Taking Victoria as the exemplar in attracting private sector involvement it then briefly covers the changes to Section 193 of the Act that governs key aspects of these activities. The remainder of the paper then discusses the risk implications of the legislation. Of prime concern is the fear that any increased regulation will bring about unacceptable delays in the conceptualisation, design and negotiation stages of a project for both the public and private parties engaged in the enterprise. The degree of internal and community reporting and accountability in the interests of good governance required of local governments is already quite onerous and time hungry and to give context these aspects are outlined in the paper. When reflecting on past experience, several councils reported unreasonably lengthy delays when they then needed approval from the state under section 193, and there is nothing in the updated legislation that would have any impact on this. The basis of these delays appears to have been that the state itself was ill-prepared to respond in a timely and efficient manner. As a result it would seem more than one council has actively sought to set up their projects in such a way as to by-pass the need for state government approval, not to avoid scrutiny so much as to avoid further delays and added costs, both direct and opportunity. This and other risk factors are covered drawing extensively on a case study of a major inner city development to exemplify the argument. The paper closes with an update on what the state is already doing to meet its obligations under the Act and where it is still developing its response.

Publication type

Conference paper

Research centre

Swinburne University of Technology. Faculty of Life and Social Sciences. Institute for Social Research

Source

[Proceedings] 2nd Bi-Annual Conference on the State of Australian Cities, Brisbane, Queensland, Australia, 30 November-02 December 2006

Publication year

2006

Publisher

The Urban Research Program, Griffith University

Peer reviewed