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Shortlist announced for major schools building project

Shortlist announced for major schools building project

Two consortia have been shortlisted for a major schools building project to construct four schools worth more than $200m, says Kim Shannon, head of the Education Infrastructure Service for the Ministry of Education.

The four schools to be built by the successful tenderer will be Aranui Community School and Rolleston Secondary School in greater Christchurch, Wakatipu High School in Queenstown, and a new school in Auckland to be announced. Three of the schools will open in January 2017 and one in January 2018. All four schools are to be built using a public private partnership procurement model.

“I’m delighted with the high quality consortia that have been chosen following a robust selection process. Those consortia will now proceed to the next stage of the tendering process,” says Ms Shannon.

They are:
• Investec – sponsored by Investec, construction by Naylor Love Construction, Opus Architecture as the lead designer, and facilities management provided by Spotless Facilities.
• Future Schools – sponsored by Morrisons, construction by Hawkins Group, ASC Architects as the lead designer, and facilities management provided by Programmed Facility Management.

Under a public private sector partnership, the design, construction and financing is managed by a private contractor. The contract includes property maintenance for 25 years, leaving school leaders to focus on raising student achievement. In other schools, the school itself is responsible for property maintenance.

“Based on national and international experience and lessons learnt from the Ministry’s first PPP at Hobsonville Point primary and secondary schools, we expect the second partnership has an estimated cost savings of between 2% to 8% over the 25 year period,” Ms Shannon says.

“The successful tenderer will need to demonstrate quality design and construction, high level facilities management and overall value for money,” says Ms Shannon.

The two consortia will now proceed through an interactive tendering process and final bids will be submitted in October this year.

Questions and Answers

Which schools are included in this building project?
School Proposed opening date
Aranui Community School (Christchurch) Jan 2017
Rolleston Secondary (Canterbury) Jan 2017
Wakatipu High School (Queenstown) Jan 2018
New school in Auckland Jan 2017

Each school will have its own board of trustees. Establishment boards will oversee the development of the three new schools (Wakatipu Secondary School already exists, and will be relocated to a new site).

How does a school property public private partnership work?
In a public private partnership (PPP), a private partner is responsible for designing, building, financing and maintaining the school property for the term of the contract (25 years from the opening of the final school).
The Ministry of Education pays the private partner quarterly, with this payment reduced if the school facilities do not meet the standards specified in the contract. This effectively provides a 25-year guarantee on the buildings, unlike schools procured under traditional procurement models
The provision of education remains the responsibility of the principal and board of trustees. The government retains ownership of the land and buildings throughout the life of the contract.

What is the value of this project?
The exact cost will not be known until after the procurement process and negotiations with the successful consortium are complete. The Ministry estimates the cost of construction and maintenance for the project will be over $200 million.

What are some of the impacts of a PPP on school property management?
Having a professional facilities manager responsible for school property reduces the amount of time senior school staff spends on property, freeing up this time to be spent on teaching and learning.
PPP schools are designed and built to meet the Ministry’s weather-tightness requirements, but if any defects arise over the life of the contract the private sector partner is responsible for correcting them.
For some projects, a PPP offers the best opportunity to deliver value for money. This is because the private sector partner engaged to deliver the asset is also responsible for its long-term performance, so they make design, construction and maintenance decisions with the longer term in mind.

What happens if the quality or prices of bids do not meet expectations?
The Government retains the right to revert to traditional means of procurement if that would provide the best value for money and best services for taxpayers.
The contract will include a series of key performance indicators. If these are not met, deductions are made to payments to the PPP contractor. Ultimately the Ministry will retain the right of ‘step in’ and terminate the agreement should dispute resolutions fail to remedy underperformance.

What happens next?
The two shortlisted consortia will now progress through an interactive Request for Proposal (RFP) phase with final bids due October 2014.

Is the Ministry of Education considering the use of public private partnerships for other schools?
The Ministry will continue to consider the use of PPP for projects of sufficient scale.


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