It is simply very terrific that there is absolutely no check whatsoever on the executive arm of government in the Waratah state when it comes to signing so-called ‘public private partnerships’, a title that is itself a splendiferously Orwellian wonder to behold. I mean, the relevant ministers get to see the contracts. Their staffers get to see them. The public servants in the relevant central and line agencies get to see them. The private lawyers servicing the parties get to see them. And I understand that private shareholders in the contracting corporations can get to see them, if they are persistent enough. With virtually every man and his dog who stands to make a buck out of the deal checking the things, ordinary Joe Public can just bugger off. Whose city do you think this is that they’re stuffing up? What about the parliament? Hah, hah. What are you? A comedian? What about the parliamentary accounts committee? No way pal. Who’s money do you think this is that the executive is shovelling into these corporations? Unlike those Victorians, who tend to get the democratic vapours about such matters, not even the friggin’ Auditor-General is shown anything in NSW but a contract summary. Works like a bloody dream.
Life, Culture and Politics from BrisVegas
Larvatus Prodeo was an Australian group blog which discussed politics, sociology, culture, life, religion and science from a left of centre perspective. more»
Not too dissimilar in the Sunshine State. Not just with PPPs here – but also the cash and tax exemption inducements paid to various companies (ie Virgin, Boeing) to set up shop. But we’re told it’s ok – because it’s all about JOBS.
Interestingly, in the OZ today Henry Ergas of the PM’s infrastructure taskforce had this to say about PPP’s.
And.
Of course those of us who believe in proper arrangements being made for this kind of thing are always being accused as leftists and anti development for using the same language.
It goes without saying that this is exactly what NSW’s cross city tunnel has exposed to public eyes, even though we still don’t know the full details of the contract.
There’s a troppo post on the same thing.
http://troppoarmadillo.ubersportingpundit.com/archives/009617.html
It’s called privity of contract cs, a wonder indeed to behold, (and bugger all we can do about it)
Besides, it protects the innocent, like yourself, for example, like if you knew what they paid Wendel S. under contract, you’d probably burst a blood vessel.
[Tongue in cheek and shuts down computer to avoid 40,000 volt blast]
I think part of this whole PPP thang is driven by State Labour Governments obsessed by the fiscal implosion of the Cain/Kirner Government. So they’ll try all sorts of stuff to demonstrate they’re trying to keep the budget in surplus and avoid debt.
And PPPs with decades long frameworks and commercial in confidence FOI armour are an excellent way of announcing major long term infrastructure projects while also being able to hand down “responsible” budgets for the short to medium term.
Well hey, it’s working in Victoria.
Nabs, that’s certainly consistent with Tony Harris’ commentary at Troppo.
I’m no expert, but I do wonder if the PPP mess(es) could be avoided if only there was some vast, exponentially growing pool of funds looking for prudent, long term, stable investments, possibly through Government bonds.
In lieu of such a pool, I can only express the utmost confidence in the Labour government’s fiscal responsibility.
For those who may be interested in some of the wider issues, I suggest checking out the Australian Auditor General for a speech to Italian managers (yes, go figure!) with which I have much sympathy, or googling my name and PPPs.
I think Leighton Group was involved in the Sydney tunnel project. They get into most of these things because Thiess, John Holland and Leighton Contractors, all of which they own, bid against each other as part of various consortia. In 2005 they made $205 million (net after tax), which sounds a lot until you realise that there revenue for the year was $7.7 billion. That’s about 2.6%. Pretty slim, although some of their other investment ratios are healthier. Return on equity, for example, was 23%.
My point is that they can’t afford accidents and they are the biggest we’ve got amongst the developers. In 2004 they blew over $60 million, from memory, on the Spencer St railway station redevelopment. The share price fell out of bed and the shareholders had to make do with a steady dividend instead of the usual 10% or so increase.
They sacked the manager responsible and revamped their risk management procedures. With one accident only the profits and share price rebounded nicely. But I reckon if they had more than one slip-up every 3-5 years they’d be toast.
So this idea that you push the risk onto the private sector is dubious IMHO. You’re bound to be paying for it somewhere.