Infrastructure Unit To Nail Down PPP Potential
June 17th, 2009
Transport Minister Steven Joyce says the newly established Infrastructure Unit, within Treasury, will be key to developing the potential of PPPs to fund transport projects. He came away from his Aust trip last week with a sense of the “hierarchy of procurement models” of which PPPs are just one option. Sydney offers an immediate case study, with the Reliance Rail consortium under contract to deliver and maintain 78 new commuter trains worth $A2bn in the city by 2013, a contract which has created friction over delivery delays.
Joyce says further scope for PPPs will come out of the Infrastructure Unit’s work. “My first priority is to get the projects scoped under the roads of national significance, which have pretty secure funding. Then we will look at any shortfalls” which may warrant private participation. While the funding for electrification of Auckland’s railroad is a potential early starter for PPPs, a broader review of KiwiRail may come to fruition in the next few weeks which will help the Govt decide funding priorities for the national railroad.
KPMG, noting there was little in this year’s budget for PPPs, predicts more evidence in the 2010 budget, by which time the Treasury unit will have completed its initial assessment of the opportunities. Joyce says the Govt is still in “information soaking-up mode” on the future of KiwiRail, which has yet to conclude a permanent business plan. One option is disaggregation, where the network is chopped into economic units and stretches of the main trunk line taken out of service.
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