Waratah is another emblem of state of NSW - on a downer

It's a concept that sits right in there with flood appeals, flags, the Southern Cross and Astrayaday.

But this week, in the midst of all the jingoistic celebrations, yet another disaster unfolded in yet another PPP.

First it was the tunnels. The Cross-City Tunnel went broke. So, too, did the Lane Cove Tunnel. In sunny Queensland, we've seen the debacles associated with the Clem7 tunnel and the ill-fated Brisconnections.

This week, we were told there were yet more problems with the delivery of the Waratah trains, the new generation rail sets that would catapult NSW commuters firmly into the 1990s. They would be delayed for the third time. Or was it the fourth? It was difficult to tell because the first few delays were never really announced.

If they do indeed arrive in April, as promised on Thursday, they will be more than a year overdue.

The company, the main P in the PPP, behind the latest debacle is Downer EDI, an engineering group that in the past decade has become well acquainted with controversy.

Despite it shedding chief executives with monotonous regularity, the NSW government in its wisdom awarded the contract to Downer EDI, the main shareholder in the Reliance Rail consortium, back in 2006.

Downer once had a track record in constructing and delivering rail stock. But the main attraction to the government was the price. Downer trumped its private-sector opponents for the contract because it was

the cheapest.

Downer expects to make a $400 million loss on the Waratah train contract, equal to several years of profits. But that is only if the banks to the consortium extend their loans. Otherwise the entire contract could collapse, leaving the NSW taxpayers with a financial headache and Downer in dire straits.

And this, after the financial debacle over the sale of the state's power assets.

After years of outsourcing infrastructure projects to the private sector, many with disastrous consequences, you have to wonder about the wisdom of these decisions.

Why has government, at both national and state levels, shirked its responsibility to the electorate for infrastructure development?

We still seem to have the same level of red tape and taxes. But key programs have been handed over to those with no public accountability and a desire to profit.

To a large extent, the answer to this conundrum can be sheeted home to an ill-conceived view that governments should not take on any debt, for fear of losing their coveted AAA debt ratings status, which seems a pointless ambition if you never want to borrow.

In politics, debt is considered to be evil and it's an easy card to play, to whip up fear. "We're putting our children and grandchildren in hock. We're mortgaging the future." You hear it every election.

But take a look at the corporate world. There, the opposite view is taken. Debt is essential for growth. Analysts look for the ability to repay interest and to refinance, and whether there are adequate assets to cover the debt, rather than the size of the debt itself.

A company with no debt is a company with a "lazy balance sheet", a corporation where management is considered incapable of seeking out investment opportunities that deliver more than the cost of interest. These are the sorts of companies investors avoid like the plague.

Perhaps it is time we looked at government in the same way.

The national infrastructure has been left to run down for decades because of our obsession with zero public debt. The absence of interest payments may have reduced the

drag on taxes, but it has not come without cost. Our export performance is not as

efficient as it should be.

And, on a range of services, taxpayers

are forking out far more for toll roads, transport, power and a range of services that have been handed over to the profit-seeking private sector.

Like all philosophies, the push to private ownership, which gathered pace during the 1980s, was rooted in powerful logic.

Governments should not be in business, the theory went. Private enterprise was

more efficient, less bureaucratic and would better serve taxpayers on a range of services from airlines and banking through to telecommunications.

The problem, however, is that our politicians became addicted to the concept

of outsourcing, creating the facade that

they were brilliant economic managers when, in reality, all they were doing was shifting the public debt into the private sector (which doesn't have a AAA rating

and must pay more interest), thereby making taxpayers pay even more for essential services.

Finally, when there was very little infrastructure left to sell, they began auctioning off future projects.

The cash-strapped NSW government was among the worst. If you had to concoct a list of vital infrastructure needs, virtually no one would have come up with a short tunnel from Balmain to Randwick.

But the Cross City Tunnel became a reality because the government needed cash and the investment bankers advising it knew they could sell the project to gullible investors. They worked the numbers backwards. They knew how much cash the project needed to generate, and then calculated how many cars needed to run through the tunnel to generate the cash flow. Brilliant!

And to achieve those traffic numbers, roads would be closed to ensure commuters were forced to pay.

These were projects designed not to achieve a public benefit, to solve traffic management problems, but to deliver windfall gains to a cash-strapped administration. The same process was repeated on the Lane Cove Tunnel and on the Brisbane projects.

In contrast, the Victorian government, when it called for tenders to build the ConnectEast motorway, stipulated the winning bidder, rather than be decided on its upfront fee, would be the one that could offer the lowest toll to the public.

The Keneally government in NSW has washed its hands of any responsibility over the latest debacle with Downer EDI and the Waratah trains.

But if governments are to continue with these kinds of arrangements, it is time they began to shoulder some accountability. After all, the third P in PPP stands for Partnership.