Inverse » Elon Musk is getting dug into the nitty-gritty of city politics. The Boring Company, a venture the entrepreneur started two years ago, has been aiming to convince local legislators that the answers to their traffic woes is building lots of tunnels. City officials from Sydney to New York have mixed reactions, now that an initial 1.14-mile test tunnel (cost: $10 million) has been opened for assessment.
Bloomberg » In face-to-face talks at the White House this week, Prime Minister Malcolm Turnbull will propose using a chunk of Australia’s A$2.53 trillion ($1.99 trillion) pension savings pool to help unlock funding for Trump’s infrastructure push. He’s being joined on the trip by local money managers who help control the world’s fourth-largest pot of retirement savings.
Engineering News-Record » Two years after AECOM paid $200 million to settle litigation with investors over its traffic forecasts in a now-defunct public-private-partnership tunnel concession in Brisbane, Australia, participants—revenue forecaster Arup, among them— are in a similar P3 toll-road dispute over another failed project. But this time the parties are headed for federal court after mediation broke down earlier this month.
This editorial takes a strong stance for more clarity when the government of Victoria enters into public-private partnerships, especially about public funding that is involved. One project, the Royal Children’s Hospital, was actually indirectly funded by the government since they were the primary buyer of the $1.4 billion bonds issued by the project consortium. The primary concern with this arrangement is the lack of public disclosure as there was no mention of this government financing either when the contracts were signed or at any point during the project. While it notes that this not direct public funding, it’s not tax revenue, however it claims that it is a stretch to call it purely private funding as the government has claimed.
This article investigates the financial troubles of the Royal Children’s Hospital, a project that was developed through a public-private partnership under the guise that no public funding would be used. In January 2014 however, it was revealed that a government owned investment-company the Victorian Funds Management Corporation (VFMC) was the primary financial backer of the project. The bonds that VFMC bought to finance the project are no under pressure as Standard and Poor’s recently downgraded their credit to junk status because it found the rent being charged to be unsustainable. VFMC is responsible for investing $41 billion on behalf of government bodies including the super fund for paramedics and police and the Transport Accident Commission among others and any substantial loss could impact these agencies’ bottom lines. Article goes on to provide more financial details and history of the project, including how one of the main project managers sold its stake and never paid its promised $35 million donation to the hospital.