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ANZ, BNZ, ACC throw financial support behind Macquarie advised bid to build, operate Wiri PPP prison

Property
ANZ, BNZ, ACC throw financial support behind Macquarie advised bid to build, operate Wiri PPP prison
4th Apr 11, 5:49pm by Gareth Vaughan

By Gareth Vaughan

The ANZ, BNZ and Accident Compensation Corporation (ACC) are three of the key funders lined up for a Macquarie Capital-advised consortium that's one of three short-listed by the Department of Corrections to build and operate a prison through a public-private partnership (PPP) at Wiri.

Duncan Olde, New Zealand division director at Macquarie Capital, told interest.co.nz the Secure Future Consortium which Macquarie is acting as financial adviser to, has secured the ACC and John Laing Investments as independent equity providers, and ANZ, BNZ and various international banks with PPP expertise as debt providers should their bid be successful.

Other members of the Secure Future Consortium include Serco Australia, Fletcher Building's Fletcher Construction unit, and Spotless Services.

It's up against the NZCS Consortium whose financial adviser is Lend Lease unit Capella Capital and also includes the GEO Group Australia Limited, Hawkins Construction and Honeywell. The GLM Consortium, the third short listed consortium, has KPMG as its financial adviser and includes G4S Australia and New Zealand, Leighton Contractors and Mainzeal Property and Construction. 

New names may yet be added with each consortia still finalising its membership. The Wiri mens prison will be New Zealand's first social infrastructure PPP.

According to the Department of Corrections, the successful consortium will design, finance, construct and manage the new prison. The Department will provide regular payments to the consortium over the 25 year life of the contract.

These payments will cover the costs incurred by the consortium in constructing and managing the prison. The Department won't yet put a dollar figure on how much the government plans to spend on the project or how much it'll cost overall, with a spokesman saying its work with the three short listed consortia will determine the cost of the prison's construction.

Department of Corrections staff plan to meet with representatives from each consortium several times over the next few months with their final proposals due in early August and plans for a finalised contract to be in place by July next year. At the end of the 25-year contract, the prison will revert to Crown ownership.

See previous story on the Wiri proposal here for more detail and background.

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by  Gareth Vaughan  |  6th Apr 11, 1:58pm 1302055096

And now the government plans PPP schools:

Hobsonville schools PPP will bring wider benefits

The Government intends to commission two new schools in Hobsonville that will be designed, financed, built and maintained under a public-private partnership, Infrastructure Minister Bill English, Education Minister Anne Tolley and Associate Education Minister Rodney Hide announced today.

The Government will now seek formal expressions of interest from market participants for new primary and secondary schools at Hobsonville Point, north-west of Auckland. Subject to satisfactory bids, the schools will be the first built in New Zealand under a PPP.

“This Government has made it clear we are open to greater use of private sector expertise where it makes sense. Building and maintaining two new schools through a PPP is likely to result in a range of benefits," Mr English says.

“While the financial savings in this case are expected to be relatively small, overseas experience shows appropriate use of PPPs introduces new design, financing and maintenance techniques, which flow through to the wider public sector – helping it to improve its procurement and management of infrastructure.

"That is vital when the Government holds $223 billion in assets, which will grow by $33 billion over the next four years. We need to ensure taxpayers get high-quality services at the best price from this large and growing asset base," Mr English says.

Mrs Tolley says the PPP will benefit students and teachers.

"The private sector partner will be responsible for financing, designing, building and maintaining the property for 25 years of school operations," Mrs Tolley says.

"This means the schools and boards can focus more on teaching and learning, without the added responsibility of managing the property.

"The land and school will still be owned by the Government, while the board of trustees will remain wholly in charge of the governance and day to day running of the school.

"In addition, the private-sector partner will carry the risk around time-consuming and expensive problems like leaky buildings and be required to sort them out quickly or suffer a financial penalty,” Mrs Tolley says.

Mr Hide, who has delegated responsibility for education PPPs, says the Government chose the Hobsonville schools because together they were large enough to be viable as a PPP.

“Today’s announcement comes after in-depth investigations of the suitability of PPPs for new school property by the Ministry of Education and the Treasury," Mr Hide says.

"A single establishment board of trustees has been appointed to oversee and assist in the process of setting up the new schools. The board has been briefed on PPPs and will work closely with the Ministry of Education throughout the process."

The new primary school is scheduled to open at the start of 2013, with the secondary school due to open at the start of 2014.

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