Contractors want clarity on partnership plans

The New Zealand Contractors’ Federation wants clarity about the nature of the Government’s proposed private public partnership plans.

Following Finance Minister Bill English’s announcement that PPPs would be considered, among other procurement options, for all Government infrastructure projects worth more than $25 million, federation Chief Executive Jeremy Sole said the choice of partners was crucial to success.

“Are they talking about finding partners and then bringing in constructors or are they expecting constructors to be the partners?” said Mr Sole.

“If they are looking to constructors as partners then there is a risk of excluding some Kiwi companies because they are unlikely to want to carry the risk of being financers as well - and that would mean excluding some of the best constructors in the world.

“This is especially worrying given it was recently reported that Chinese Government-owned contracting firms have expressed interest in constructing large infrastructure projects in New Zealand. If the Government sees the constructors as finance partners then we could easily see the major New Zealand civil construction firms wiped out. Clarity is needed around the types of structures envisaged for PPPs in New Zealand.”

Mr Sole said that decisions should be based on the overall effect on the New Zealand economy and the economic benefits that infrastructure-led development can produce.

“What the Minister said was that the Government would consider a range of procurement options, including PPPs, and would justify its choice,” he said.

“It is essential that New Zealand maintains a strong and healthy civil construction industry and that procurement options take into account the wider economic impacts including accounting for the future costs of not having a viable industry.”

ENDS

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