Public private partnerships (PPPs) are nothing new when it comes to property, development and infrastructure, but recent years in New Zealand have shown they might play a bigger role in our future than they have in our past. One only needs to look at anchor projects in the Christchurch rebuild, major state highway projects, and housing projects in Auckland for recent examples of how the public and private sectors can work together to deliver community benefits. Although there will be criticism from some quarters that private companies shouldn’t profit from public projects why else would they participate? In doing so they can reduce the taxpayer’s risk profile and introduce much needed capital and expertise.
And it’s not only central government that is looking at the potential of PPPs, local government is active too as it looks to deliver more within existing budget envelopes. Here at The Property Group (TPG) we have been assisting Wellington City Council investigations into a Council-led Urban Development Agency (UDA). Wellington City sits at the fulcrum of a broader regional market, both commercially and in housing, which, allied to an ever decreasing supply of land, poses real challenges to the City’s strategic goals, including the ability to supply housing to a steadily growing population. Through its recent annual planning process Council has consulted on the merits of a UDA that could assemble land parcels, prepare development masterplans and partner with private developers who would be responsible for the physical delivery of projects. The proposal attracted a large number of submissions and media attention and we will be watching closely to see whether Council decides to run with the idea.
As my examples touch on, we have our own issues in New Zealand that have brought PPPs firmly into the spotlight, but more broadly the global financial crisis has forced both government and business to think about new ways to raise capital and reconsider the power of partnership. In New Zealand development and local government are intrinsically linked and moving beyond a “them and us” mentality to one of collaboration and partnership seems, to me. to present a huge opportunity. Of course we must not lose sight of local government’s primary focus of fostering and protecting the public good, but done well the positives can far outweigh the negatives.