Home' Future Building: The Australian Infrastructure Review : July 2011 Contents 76 futurebuilding
Volume 2 Number 1
English speaking: NZ pursues more PPPs
Under the PPP – the first of its kind in Australia
to provide social housing – Westpac and Becton
Property own the development, while Spotless
and St George Community Housing are the service
‘We are getting started on that,’ English says.
‘Credible market participants like Westpac are getting
started on that and saying they are interested.’
Defence is also a likely candidate for more private
sector participation. The government unveiled its first
defence white paper since the late 1990s, setting out
a blueprint for the next 25 years.
Some 1400 jobs, mainly in support and IT roles,
may be contracted out to the private sector. The white
paper is targeting about NZ$250 million in savings,
in part by consolidating bases and back offices, as
the government makes way for about NZ$4 billion
in new ships and aircraft.
The government is reportedly planning to
consolidate its central North Island defence hub
at Ohakea Air Base. That could mean moving
operations from Waiouru and Trentham to Ohakea.
‘Defence has a five-year plan for significant
efficiency and rationalisation and we would expect
PPPs to be a big part of that,’ English says. ‘We are
gleaning what we can through the PPP discussion.’
One challenge may be attracting significant
foreign interest, given the slow ramp-up of the
pipeline and the comparatively modest size of New
Zealand projects. English knows that the government
will have to do more if it wants to attract the Leightons
and Lend Leases of the world.
‘Contractors may look at our pipeline and think
they would be better off in Western Australia,’
Forgan at the National Infrastructure Unit says
projects need a minimum price tag of about NZ$100
million, before they will realistically be considered
for delivery under a PPP.
That’s a higher minimum threshold than in
Western Australia, where the state’s treasury has
stated projects above $50 million will be assessed
for suitability for PPP procurement models.
Western Australia, too, has been competing to
attract private interest and investment for its projects.
Western Australia has brought forward a range
of PPP projects, including the Mundaring Water
Treatment Plant – due for completion in 2013; a
5000-vehicle multistorey car park; the 327-bed
Midlands Health Campus; and soon, a new prison
project at Kalgoorlie.
‘What we’re interested in is good price tension
in the market. The more people we can attract, the
better. That means developing a pipeline of projects,’
‘The feedback from the Australian operators is
that “well, when it has a few more zeroes on it we’ll
come and see”.’
Bankers say that while both New Zealand and
Western Australia are showing promise, their primary
attention, for now, remains on Victoria, New South
Wales and Queensland.
Said one veteran banker: ‘Victoria does a big PPP
every year. When they have a project on the go, we
send them our “A-team” every time.’
English said he expects interest from mid-tier
Australian operators and service providers that aren’t
put off by the smaller scale of the projects.
‘We are hoping to attract operators who are able
to be a bit innovative and interested in smaller scale.
‘We’re not ruling anyone out.’
Serco says it’s keen to participate in suitable
projects in New Zealand as the pipeline firms up.
‘Serco is committed to building capability in New
Zealand, as we see opportunities in a number of
sectors,’ says Emma Needham, a Serco executive.
‘New Zealand is a long-term, strategic and
attractive opportunity for Serco.’
One challenge may be
attracting significant foreign
interest, given the slow
ramp-up of the pipeline and the
comparatively modest size of
New Zealand projects. English
knows that the government will
have to do more if it wants to
attract the Leightons and Lend
Leases of the world.
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