Aussie rules

While the UK PFI industry sipped Pimm's and languished in the summer heat (ok so maybe just languished), investors in the Australian market spent their winter away from the BBQ and surf for one of its busiest periods in recent memory.

Although there may never be an explosion of PPP projects Down Under in quite the same way many expect for the US, the gutsy decisions being made at state (and federal) level contrast starkly with the indecisiveness and mixed messages elsewhere in the world.

The speed of procurement during the past few months has been one of the main positives. As well as bidder selection moving along in a matter of weeks for Victoria's Cancer Centre and talk of Sydney's new convention centre looking like it might produce an expressions of interest before Christmas, growing investor appetite has also supported financial close on the country's first water PPP and the more straightforward QEII car parking scheme.

The reason for this, says one of the leading advisers out there on a trip to London, is that the country is seen as low risk in an increasingly risky global market.

"The most interesting side to this are the UK firms such as Infrared and John Laing now committing their own equity to projects, while Spanish firms such as OHL eye up pipeline," he says.

In terms of pipeline, the state of Victoria has led the charge up until now, but a new government in New South Wales makes it the one to watch. Ernst & Young was recently appointed adviser on the state's North-West Rail Link which will use PPP on its stations and a design and build on the tunnel section.

So if the momentum can be maintained following the current glut of deals, what type of projects can investors expect to follow in 2012?

The recent focus of the market has very much been on social infrastructure – hospitals and prisons – but how the transport sector develops following the collapse of the Clem 7 toll earlier this year will be key.

If Queensland's Liberal National Party wins its next state election in March, it has promised to establish an Infrastructure Queensland to co-ordinate, plan and fund six transport projects through private finance. That is certainly a good starting point.

There is also talk of high-speed rail but at the moment there is simply not the revenue projections to justify the long distances that would need to be covered.

But if UK equity continues to show an interest in projects, that could all change in the not-too-distant future.