National’s PPPs go overseas to roost
With National and Labour talking about greater use of PPPs (Public-Private Partnerships) to build and maintain infrastructure – schools, hospitals, roads, prisons, student accommodation – it’s worth looking at what happened earlier this year to the last round of PPPs established under the previous National government.
The service contacts for John Key’s PPPs, which were negotiated with Morrison and Company have gone overseas to roost as approved by the Overseas Investment Office in April this year here with further information detailed in this CAFCA assessment and in a New Zealand Herald article from early June:
“The British firm will now be in charge of funding services to Auckland Prison at Paremoremo, five Auckland schools, one in Hamilton, four in Christchurch, one in Queenstown as well as AUT’s North Campus student accommodation on the North Shore. Hobsonville Point Primary School, Hobsonville Point Secondary School, Ormiston Junior College, Te Uho o te Nikau at Flat Bush, north-west Auckland’s Matua Ngaru Primary School, Hamilton’s Te Ao Marama School, Christchurch’s Shirley Boys’ High School and adjoining Avonside Girls’ High School, its Haeata Community Campus, Rolleston College and Queenstown’s Wakatipu High School are the 11 education assets involved”.
“It’s not the land or buildings being sold but rather service provision funding, so the British entity will take over running aspects like cleaning, maintenance and building management, contracted to the Government to provide those services under the public-private partnership model. In turn, that British business will then contract out those services to third-party local providers”.
There are plenty of horror stories from PPPs overseas and plenty of warnings – even from the World Bank.
Aside from everything else – here we have private sector parasites hoisted onto our community as a typical leech – bleeding us dry over a 25-year contract. The only “value” is that it keeps the debt off the government’s books. And please don’t tell us about the risks the private sector takes on in these projects – any large-scale failure will be paid for by us. Our government – as the only one left standing – will be forced to pick up the tab.
The “financialisaton of PPPs” – precisely as we have seen with Morrison and Co bundling up its PPP service contracts and then selling them off on the global market – will have long-term dangers which are ignored in the decision to approve the overseas sale of these contracts.
A further danger is the recent effort by the World Bank, the G20, OECD and others to ‘financialize’ PPPs in order to access the trillions of dollars held by pension funds, insurance companies and other institutional investors.
To access these funds, governments are advised to do a whole lot of PPPs at the same time in order to create a pool of assets that can then be bundled and sold on to long-term investors. This is exactly what the financial services companies did with home mortgages at the turn of the century, which brought us the global financial crisis of 2008.
In typical short-sighted fashion National and Labour are oblivious to the dangers and happy to leave us to pick up the tab.
The amount of NZ Public-Private Partnerships that have failed as well – we need to balance such stories up.
I had a friend whose car broke down, but it doesn’t mean that all cars break down.
NZ has a simple choice to make: Either don’t build the roads and continue to kill people.
or
Build the roads and pay a toll.
There will always be an alternative road for those who don’t want to pay.
Where else can NZ get the money though? Grant’s put us in so much debt we can pay for shit
Renationalise all the shit we gave away = rolling in money .
Totally agree.
Answer: Take away right of foreign banks to create money & use the right of govt, the issuer of currency, to do the creation (subject to unused potential) of money and use it for public purpose including lending to local govt for public infrastructure. Read the book “The deficit Myth”.
Pathetic PPPs are toxic –
What a choice (sarcasm) billions blown by Labour’s woke on destroying the country, our assets and our education system, or billions blown by National on PPP’s. I guess at least with PPP’s we might get a new bridge or hospital at 20x the price it would be to get a functioning state to do it.
John, to be fair this kind of stuff in slightly different guises started to appear under Helen Clark and greatly expanded under John Key. Its so, so much bad news and is a total sell out of NZ. Its also why I am so against 3 Waters, because the same ability to do this and provisions are in there.
This kind of crap happened in Chile? and it got to the point where no one could afford water to drink or to farm as they had for generations. Basically its a way of selling NZ out from under all NZers and this abomination takes the privatisation message one step further.
Privatisation means that you are so imcompetent, you cant run a service for less than someone else can. These PPPs mean, the same but now we add another layer of trough above them all. Or in other words, you cant run a service for the same as someone else even when that entity is paying yet another entity to govern the whole thing.
Where is the logic in this?? We need a new democratic system. This is absolutely sickening.
The last thing we need is more PPP’s
We do not have the expertise here and with our low wage economy we need to bring in experts. Years ago we had MOW but that ship sailed .We cannot even build a few extra houses so how are we going to cope with replacing the infrastructure needed to cope with climate change
there are plenty of well trained professionals graduating in this country, despite ourselves – there is also a huge market of competing “expertise” to choose from – it just requires vision and fortitude to make things happen.
We need to bring in ‘experts’ to do cleaners jobs in schools, run prisons etc?
it’s sad when the only game in town is plundering public good for profit
lets get the chinese in to build high speed rail and 4 lane SH 1 and when they come to collect we get the yanks to tell them to FO – simple
The article raises concerns about the overseas recipients of the PPP funds and questions their eligibility and necessity for these loans. It’s essential to ensure that the funds are being allocated appropriately and benefiting the intended recipients. Thanks to the author for shedding light on this issue and emphasizing the importance of transparency and accountability in government programs.