PDF: 3803 KB - Infrastructure Australia

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PDF: 3803 KB - Infrastructure Australia

An inherent characteristic of a PPP model is that it

results in a significant transfer of the risk of price certainty

and on time delivery to a third party contractor.

Arguably, the ability to transfer risk under the PPP

model is greater than under other models as the contractor

in the PPP model is also putting its ownership

equity at risk (rather than just capped damages).

The main distinction between the D&C model and

the PPP model is that ownership, operation and

maintenance of the assets will reside with the

Agency under the D&C model and with the contractor

under a PPP model.

Figure 2: Typical D&C Structure

Design Package

Design &

Construction

Package 1

Design &

Construction

Package 2

Principal

D&C Contract

D&C Contractor

Joint Venture Agreement

(if applicable)

Construction

Package 1

Construction

Package 3

The Design and Construct (D&C) model involves

the engagement of a contractor to design and

construct the project for a lump sum price. In some

cases this is extended to require the contractor to

operate and maintain the project (for a period) on an

agreed remuneration basis.

A typical D&C Structure (excluding operation and

maintenance obligations) is illustrated in Figure 2

below:

Construction

Package 2

Construction

Package 4

In-House

Resources

12 | Consultation Outcomes Report

VOLUME 2