PPPs for Best Auckland Outcomes

Property Council applauds Auckland Mayor Len Brown’s decisive approach on his city’s growth by a position paper on public-private partnership (PPPs) models to fund infrastructure.

According to Mayor Brown, Auckland must consider all its options when funding vital infrastructure to relieve the burden on ratepayers and taxpayers. Property Council whole heartedly supports this view and adds that this may also be a step towards resolving the issue of development contributions being fairy charged to developers.

The paper’s argument for private sector involvement in infrastructure development is driven by the efficiencies that can be determined by “profit motive, integration of life responsibility and exposure to competition”.

The benefit of private sector’s involvement in PPPs include being able to:

• Identify and manage risks and costs
• Provide specialist management and technical skills • Manage whole of life risks from design responsibility through to hand back to Government • Coordinate capital costs with whole-of-life operating costs • Improve the efficiency and quality of services • Assess market needs and capacity • Raise financing

The paper points to a UK study findings that private sector involvement in competitive local government infrastructure delivery can lead to savings of 17 per cent – a noteworthy figure.

Property Council Auckland Branch president Miles Brown supports the position paper and says it is a leap towards affirmative action.

“Auckland is our largest city and it is the fastest growing with no signs of slowing down. It is absolutely necessary to consider all options for progress and delivering the best fiscal and social outcomes.”

Mayor Brown’s comments put to rest fears of privatisation by stealth, by stating, PPPs are most successful where ownership is retained by the public sector while the risks fall to the private sector.

Property Council agrees with the mayor’s views that Auckland will not be able to meet the pressure of its required investment without innovative solutions such as PPPs.

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