Achieving Best Practice In PPP Procurement: The RailCorp RollingStock PPP

The RailCorp Rolling Stock Public Private Partnership ("PPP") between Railcorp and Reliance Rail is unique. It is the first time that Government has procured rolling stock for an existing railway under a PPP delivery model where:

• Government takes demand risk, retains responsibility for operating the trains, sets and collects fares, and maintains the track; and

• the private sector finances, designs, manufactures and maintains the trains, and makes them available for use by RailCorp in return for a performance-based availability payment.

Unlike a tollroad, hospital or school PPP, there was no existing market precedent which RailCorp could use as a basis for its contract. Accordingly, RailCorp started with a blank piece of paper and worked up a Commercial Terms Sheet which, once settled, became the basis of the PPP contract.