Here’s the excellent explainer on PPPs from
over at that this chat was based on.
Thank you
, , , and many others for tuning into my live video with ! Join me for my next live video in the app.The problems with PPPs
A recording from Bernard Hickey's live video with Patrick Reynolds on Public Private Partnerships (PPPs), which the Government is relying on to bring in foreign investors to build infrastructure
The Kākā by Bernard Hickey
Bernard Hickey and friends explore the political economy together.
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Bernard Hickey
Patrick Reynolds
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As written before... Infrastructure, health, education and energy are trans-generational investments, and as such, they are outside the bio-economic cycle of private investors, i.e. PPPs. So infrastructure investments have to be taken on board by governments, not because government is better (or more “efficient”) but because we like it or not, a government will be there in 30-40 years, yet we may not have that particular private group whom they given the job anymore. We have cheap electricity today because the government invested in hydroelectric power in the 6o to 80s... we managed to keep working and communicating with the world because we invested in fibre optics... so we have the examples...
Hmm, I could almost be convinced about paying a little more for electricity just so long as we get more spectacular quotes like "so we can be keeping [Saudi Arabia and other fossil fuel producers] in gold taps and bone saws..." 🤣
Totally agree Tim. That quote is priceless!!
Patrick’s observation that the potential PPP schemes being pimped by the government have shocking, if any, genuine return says it all. Unless they think the population of Northland is going to grow by 10x there is simply no good reason to spend your whole capital budget on 20km of motorway.
This is a superb interview and needs to be in the public domain - as mentioned in the interview - this is not being debated AT ALL on any of the MS channels. If this isn't already public Bernard, it's too important to keep behind subscribers doors - this is my vote to release. Thank you again.
Agree, very helpful information in this korero.
Excellent interview. Thanks. But isn’t the old argument for PPP that the government borrows off the balance sheet (not true if as is always the case the government is the ultimate guarantor) and that the higher cost of investment is paid for by the efficiencies of the private sector. On the latter, there’s oodles of evidence that the private sector does NOT do a better job than the public sector (school lunches?). And if the public sector is thought not up to the task of managing the work, why are they thought to be up to negotiating the deals with sharp suited lawyers for the private sector? This should be old discredited news. The current government muppets don’t look like the sharpest tacks in the box to me. ☹️
Essentially if you want the goose to keep supplying you in golden eggs you have to keep feeding the goose very well. Despite what the breathless press reports would have us believe of the so called successes of the current infrastructure funding promotional event there is no such thing as a free lunch but our esteemed government are doing their level best to disguise this fact.
Personally we have installed sufficient solar on our property to satisfy our annual electricity requirements, including charging 2 EVs and we intend to double down by upping our capacity which will provide us real cash income. If we can do this on a domestic basis with payback period of <9 years (reducing as electricity prices rise) then cheaper (per MW capacity) utility scale installations seem like a no-brainer, so why aren't our financially astute (??) government chasing such opportunities?
Thank you. That was very insightful!
A quick question...
Does the investment from overseas money barons etc show up in the govts accounts as liabilities anywhere? We have to pay the money back with a juicy profit margin at some point ! or is it more like buying a car on hire purchase but leaving the repayments off your liabilities when applying for a mortgage?
Great point that those investments that generate income should be treated differently too!
Really informative thank you.
All that borrowed money for tripling the capacity of a highway that isn't anywhere near capacity now. I detect the hand of Shane Jones in this. Every time he stands for election, he reminds us of what he got for Northland. It's a bribe. Never mind whether it's sensible or affordable, Jones is doing it for himself. Despicable man.
If we, collectively, fail to plan we are planning to fail. The turnaround costs of an energy resilient economy are a matter of urgent and vital national interest. If we leave planning to the FIRE economy and regional mandarins Bream Bay becomes a concrete aggregate mine and urbanisation dependent on motorized transport becomes a geography of nowhere from Auckland to Whangarei when the party's over.
The efficiency of home energy electrification is extremely good, we have a 6kw solar system and have run the house and 2 cars with our power bills around $120 a month for our last 2 bills, all on a less than average Canterbury summer
Alan
Do release to the public if possible . great Interview .