Public Private Partnerships

Securing Positive Project Outcomes using NEC3

The NEC3 suite of contracts is growing in use in New Zealand.  The contracts were used with apparent success for the development of the stadium and other facilities for the London Olympics in 2012, and it is the preferred form of contract by the Office of Government Commerce for all public private partnerships in the UK.

In NZ, the engineering and construction contract was used for the development of the Northland Events Centre for the Rugby World Cup in 2011.  At $16.5 million, the development was more modest that some others, but it was on time, within budget, and effective.

This paper was prepared for the NEC Users’ Group Australasia conference in Christchurch on 27 August 2013.

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Public Private Partnerships – Best value for money?

Amid the sea of confusing acronyms, one just won’t go away; PPPs, or public private partnerships.

For Governments, the appeal is obvious.  Access to private capital for public infrastructure development, private sector management efficiencies, a potential long term infrastructure investment vehicle for members of the public, enhancement of capital markets and all the economic benefits that accelerated infrastructure development brings with it.

Yet, New Zealand has been slow to join the UK and much of Australia in leaping aboard the PPP bandwagon.  With a certain air of inevitability, the Government’s announcement on Wednesday suggests that all that is about to change.

So, what are PPPs, and why are they so useful?

This paper was prepared in response to the Government’s announcement on 11 August 2010 that  public agencies proposing projects with a whole-of-life cost of more than $25 million will consider and evaluate alternative procurement options including public private partnerships (PPP).

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PPP/PFI – strange acronyms

With BOOT (build own operate transfer), BOO (build own operate), BOT (build operate transfer), DBFO (design build finance operate), BTO (build transfer operate) and other permutations, we now have the more generic PFI (private finance initiative) and PPP (public private partnership) to contend with.

Behind this proliferation of acronyms there is a useful and interesting trend developing, mostly lead from the United Kingdom, which has caught the public eye.

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PPPs – who bears the cost?

In the traditional model of infrastructure development; a model which gave our communities the foundations upon which the fabric of our society grew; our government bodies at various levels planned, designed, approved, financed, built, owned, operated and maintained all the essentials of life.  There appeared to be no limit to their purview – hospitals, fire services, telephone exchanges, postal services, roads, rail services, ports, airports, airlines, shipping lines, water, wastewater, electricity, police, defence and telecommunications, and all the bureaucracy needed to administer them, and to assure the public that the services they provided would continue to be available.

Why then consider private funding of public infrastructure projects?

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