Wednesday, November 21, 2012

A $300 million scam

The government has decided to build Peter Dunne's pet highway through Transmission Gully under a Public-private partnership. According to Gerry Brownlee, this will be more efficient and will result in cost-savings. But according to the project's Q&A [PDF], its a different story:
The design and construction cost, including inflation, is currently estimated at $1B ($882M in 2011 dollars). This figure does not include the maintenance and operations services that will also be provided by a PPP.

Under a PPP the construction cost is debt-funded. Interest cost is accumulated during the construction period and therefore we expect the debt level on opening day (2020) to be approximately $1.3B.


(Emphasis added)

So, we're paying an extra $300 million extra to do things this way. So much for cost-savings and "efficiency". But I guess that's just the price of hiding debt from the taxpayers: an extra 30% for the money launderers.

Its a perfect example of how PPPs are just a form of looting the state. Whichever cronies National selects for the job will be laughing all the way to the bank. Meanwhile, we'll be paying the price of their financial trickery for 25 years.