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Are PPPs the best we can do?

Written By: - Date published: 2:47 pm, September 13th, 2011 - 8 comments
Categories: Public Private Partnerships - Tags:

A good piece in the Herald by Max Rashbrook on the high costs of PPPs (public private partnerships) with the new Wiri prison costing over $21m before a single sod is turned or brick laid because of the complex contract negotiatons which have to cover every possible continency for the next 30 years.

Earlier this year the PSA brought out the director of the PSIU David Hall from the UK, an international expert on public spending and public private partnerships.   It was David who introduced me to this great quote from London Mayor Boris Johnson – “In other countries this would be called looting, here it is called the PPP” after Londoners were told they would have to plug a £460m tube funding gap from a PPP venture.

David’s done a lot of research into PPPs and the facts don’t stack up.

PPP is privatisation with a better name. It’s no surprise that National is in favour of them: getting rich on the public purse is in their DNA. What is more concerning is that people like Len Brown want to use them to help build infrastructure in Auckland.

Are we really so bereft of ideas as a nation that PPPs are the best we can come up with?


8 comments on “Are PPPs the best we can do? ”

  1. tc 1

    Yup and it assumes the negotiators are highly skilled so the contracts are so watertight that everything is taken care of at a lower cost than had the dept of corrections just gone and built/run it……and who are these negotiators….more of those ‘quality people’ contracted via ministers offices maybe.

    Evidence around the world proves this rarely if ever is the outcome but we know this gov’t just regards evidence and facts as inconvenient distractions.

    Smells, looks, sounds and walks like privatisation because it is with of course clauses that allow the operator to walk away if they find it all too much leaving the public to manage/catch up etc etc, oh of course you could sue the $2 shell company for failure to perform or chase an overseas corporation opearting out of a tax haven.

  2. Afewknowthetruth 2

    ‘complex contract negotiatons which have to cover every possible continency for the next 30 years.’

    Presumably that would be every possible contingency for the next 30 years except reality!

    Welcome to the real world, in which ECONOMIC CONTRACTION is the only game in town:


    All current economic arrangements will be well and truly down the drain within 5 years.

    Perhaps if someone says it every day for the next year some of the really thick people out there might start to get it.

    • Draco T Bastard 2.1

      Quoting Article:

      …managers of the economy have attempted to keep growth going by piling up debt in the mistaken belief that it is money that makes the economy run rather than energy and raw materials.

      Well, someone else gets it. Now lets see if the politicians and economists wake up to reality (I’m not holding my breath).

  3. Oligarkey 4


    Who cares? I’m a happy deluded New Zealander, who loves rugby. Go the ABs! Wohoo! More beer! John Key likes rugby, beer and titties. Where does Russel Norman stand on rugby, beer and titties? A damning silence. Unelectable.

  4. Jum 5

    To Mr Brown,

    Why are you intending to use PPPs when all the evidence suggests it will always be public loss, private profit?

    Always, when a private company takes over a public good/monopoly their expenses always include their profits.

    There are always alternatives to selling off our future. I cannot understand why you are looking to approve or condone the current government’s actions re the prison.

    It staggers me how much money Price Waterhouse Coopers must have made out of New Zealanders over the decades. Aren’t they involved with overseas clients helping them to buy up assets in New Zealand and also advising government on the Overseas Investments in New Zealand. That’s sounds like conflict of interest to me.

    • ghostwhowalksnz 5.1

      Imagine the last 5 years of the contract… if it lasts that long… its probably the 3rd owner by then as the management contract goes through a birth life death cycle. The maintenance costs will be sky high by then as the shortcuts made by the construction ‘partner’ come home too roost.

      Of course the cry from national, would be — We didnt expect such and such to happen. ( familiar)

  5. vto 6

    The answer to this is easy…

    When the PPP runs out of cash, gets into strife and comes running to the taxpayers for a bailout, as it surely will, then we simply take it off them lock, stock and barrel. Voila, a brand new prison for a whole lot less. Let the privtae chumps take the loss. More fool them for getting into bed with a democratic government.

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