English speaking: NZ pursues more PPPs By Jeff Hutton
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. 74
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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 twothirds of those are physical assets, and we need to manage them better.’
Volume 2 Number 1
6/30/11 5:13 PM
