Dunedin’s Private Public Hospital?

Dunedin Public Hospital is in line for a much needed $300 million revamp. It has recently been revealed (ODT Sat 11 June) that potential tenderers have been told by the Ministry of Health that a public private partnership (PPP) should be considered.

The question is why? Why would the government get a private corporation to borrow money for the costs of the revamp as well as build it? Then repay this corporation the costs of construction, plus the cost of borrowing the money, plus a generous profit margin for both. Surely it is cheaper for the government to pay for the costs of construction itself. And it would have far greater control over the rebuild, albeit with greater public accountability. Continue reading

National's latest threat to schools must be stopped

The Alliance Party says a plan to have schools built and owned by private companies is shortsighted and full of potential problems.
Official documents have revealed the National Government will announce the construction of a privately-built state school in this year’s Budget.
Alliance Party co-leader Kay Murray says the benefit from the Government leasing privately owned schools will not be to school children or parents, but to a new class of landlords.
She says the plan will further disrupt an education system which is already in uproar over so-called national standards, which are facing a revolt from teachers and concerned parents, and the widely-condemned “junk food” scheme which saw National throwing out nutritional guidelines for school canteens.
“Private public partnerships are a bright idea for the wealthy few to increase their wealth at the expense of the community. There is no merit in this idea.”
“It makes no financial sense at all to have large multinational corporations owning schools, who will borrow to build knowing that there is no risk because they have a guaranteed tenant.”
Ms Murray says there will be little to prevent private owners from increasing “school rents” by whatever they feel like in the future.
“It is simply a scheme to transfer money from hard pressed New Zealand families to private and possibly multinational landlords.”
Then there is the question of whether the private owners will maintain schools to the standard required, particularly if profits are threatened.
“What happens if private investors use schools to speculate on property values, or if they go bankrupt? What happens to school children while the Government, Boards of Trustees and the new owners of our schools wrangle in the Courts over contracts gone bad and schools that have substandard facilities or maintenance?”
Ms Murray says we should learn from past when it comes to privatising our essential infrastructure.
“Private ownership of school infrastructure will be another expensive mistake, in the same vein as TranzRail. Eventually the taxpayers will have to buy out the private companies and spend large amounts of money to bring facilities up to scratch again.”
The Alliance says schools must be built whenever and wherever they are needed through public funds.
“It is money well spent if it ensures every child continues to have access to a quality publicly owned and operated school.”