Home' Future Building Australian Infrastructure Review : July 2011 Contents English speaking:
NZ pursues more PPPs
By Jeff Hutton
Volume 2 Number 1
In more than 150 schools throughout New
Zealand, teachers and principals are forced to
scramble for buckets when it rains.
As water rots carpets and damages walls, school
principals make repeated calls to tradesmen to patch
up buildings. Why? Because in the decade to 2006,
the government of the day oversaw a poorly executed
renovation spree that saw poor craftsmanship and
materials deliver substandard outcomes.
The scandal will result in NZ$1.5 billion in
damage; about a tenth of the country’s NZ$13 billion
worth of school assets. But the embarrassment of
the programme – which saw the government fail to
adequately manage its risks – has created a public
appetite for greater private sector involvement in
infrastructure – particularly in education.
Since his election, Prime Minister John Key and
his NZ National Party Government have moved
quickly to begin spelling out a pipeline of public
private partnership (PPP) projects – the most recent a
package of schools announced in April.
But even with a softer public attitude to PPPs
and the popularity of the Key Government, the
public sector is still taking a cautious approach to
PPPs. Officials warn that the shape of PPPs and
their justification will differ from overseas markets.
Deputy Prime Minister Bill English – who also serves
as the country’s Minister for Finance (Treasurer) and
Infrastructure – vows that there will be more projects
to come if, as widely expected, the Key Government
is returned at the election in November 2011.
‘We see the role of PPPs expanding,’ English says
in an interview in his Wellington office on the eve of
his government’s first announcement that it will build
two schools through a PPP model in Hobsonville
Point, north-west of Auckland.
‘We own NZ$220 billion in assets. About two-
thirds of those are physical assets, and we need to
manage them better.’
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