Towards collaborative infrastructure procurement

Abstract

Infrastructure projects where many partners and technologies must work together to produce a functioning and sustainable outcome are often challenging. Australia, Canada and UK are among the few countries that have actively been rethinking infrastructure procurement. In these countries, the private sector has been given a bigger share in infrastructure projects, and this trend is spreading to other countries. The authors contribute to the literature by investigating infrastructure owners' and investors' motives and challenges to engage in closer collaboration in a country using traditional procurement methods. They identify problems in building successful collaboration and suggest ways to overcome these challenges. IMPACTPrivate investors can help governments overcome budget constraints in infrastructure procurement and to increase the quality of infrastructure assets. However, private investors' engagement can result in inflexibility and high costs for both taxpayers and the users of the infrastructure service. Australia and Canada are forerunners in building successful collaborations with private investors in the infrastructure space. In a three-year project, the authors attempted to get public infrastructure owners still relying on traditional infrastructure procurement to collaborate with institutional investors for the long term. This paper documents the insights received during this journey, providing lessons for countries considering brokering direct investment deals.