A more balanced approach to PPPs

Comments on Stephen King "As another toll road bites the dust, what is the future for PPPs?", 25/02/2013, https://theconversation.edu.au/as-another-toll-road-bites-the-dust-what-is-the-future-for-ppps-12386


The solution mentioned in the second last paragraph is a bit of too one sided in terms of risk bearing, because it would leave the future users and the government bear all the risks and the private partners virtually none.

A more balanced one is that a solution also make the private partners bear at least half of the risks and the government as the public partner bears half, similar to the Henry mining tax design, but differs to that design in a crucial and fundamental way, that is, the risk sharing is built in in the design before a project starts.

Unlike the Henry mining tax which would come into play in the middle after a lot of risky private investments have already been made and factored into the price of those mining venture as reflected in the share price.

Only in this way it would be a fair deal and the private partner will put likely maximum efforts into those PPP projects. Otherwise, moral hazard may arise, because, in most cases when government is involved and where the responsibilities are not clearly defined, the government (taxpayers) would end up if the projects go wrong, but the private partners will gain if the projects go upside.

As to the case that Australian governments can borrow at much lower rate, why don't they borrow and then quasi lend to the private partners to share the savings, say half and half, so that it does not change/affect the balance sheet of the government but the public partner (government, that is the taxpayers) can benefit from it?

Lies and the select use of statistics, an expert case

Comments on Ian Castle’s “Measuring China’s size and power”, 10/05/2009, http://www.eastasiaforum.org/2009/05/10/measuring-chinas-size-and-power-correctly/comment-page-1/#comment-26844

Thanks Ian, for reminding people some basic statistics regarding international comparisons.

Figures and numbers can be very misleading when misapplied or interpreted, irrespective what intentions their users might have. Now we have one of the most highly regarded authority figures in statistics shows us how easily that can happen.

Greg Sheridan should be one of the leading commentators on defence and security issues in Australia, probably well regarded and respected among certain circles. It is fascinating that he could be so wrong in using and interpreting statistics, especially in his area of expertise, military power and security.

I have no expertise at all in the areas of security, defence and war, and have not followed very closely. However, I do have an impression sometime when I happened to read his articles. They generally left me with an impression that he tended to be very much biased in his views, at least not objective enough on those issues to give people informed understanding.

One would wonder how some experts can show such shallow depth of understanding in their own areas of expertise. The precursor leading to the Iraq war and the pre-empty invasion by the coalitions of willing will always serve as a stark reminder on what costs could be if the so called experts in defence and security got their understanding of the very facts terribly wrong.