National hiding true cost of Transmission Gully Partnership
National hiding true cost of Transmission Gully Public Private Partnership
The Government must release the findings of a Treasury study comparing the cost of procuring Transmission Gully through normal public funding with the cost of a Public-Private Partnership before any contract is signed, Green Party transport spokesperson Julie Anne Genter said today.
As part of the process of procuring a Public-Private Partnership (PPP), Treasury undertakes a ‘Public Sector Comparator’ test, which ascertains whether it would be more cost-effective to procure the project through normal public funding. Information received by the Green Party from anonymous government sources suggests the Public Sector Comparator test for Transmission Gully showed that it would be cheaper to fund the project normally rather than through the PPP that National is pursuing. The Government is refusing to release the Public Sector Comparator results until after the PPP contract is signed.
“National is trying to lock us into a $3 billion, 25 year contract with a foreign bank, and it is hiding crucial information about that contract from Parliament and the public,” said Ms Genter.
“Parliament and the public deserve to know for sure that the Government is getting good value for money when it spends billions of our dollars. National’s refusal to front up and release the Public Sector Comparator suggests it has something to hide.
“As has been shown again and again internationally, PPPs are more expensive than normal public funding. A PPP is essentially a high-interest loan that taxpayers repay over 25 years, which is much more expensive than funding the project out of normal government revenue.
“Government figures show that Transmission Gully will cost $900 million to build but payments to the private consortium will total over $3 billion. National doesn’t want to admit it, but the PPP makes a bad project even more expensive.
“The attraction of a PPP to National is it allows it to build uneconomic projects without finding the cash to pay for it. Instead, National plans to lock generations of Kiwis into paying a premium price for an uneconomic motorway for the next quarter of a century.
“There are a number of smarter and more cost-effective transport projects, including safety upgrades to the existing road north of Wellington and better train services, that the Green Party would fund instead of paying billions in interest to private investors,” said Ms Genter.