Posts Tagged ‘PPP’

Labour & Nats PPP perfidy

August 26, 2008

You have to love National’s Pakuranga MP Maurice Williamson. Maurice just can’t help but tell the truth, in his enthusiasm for the latest right-wing plan.

This time its road tolls. You would think National would have learnt from the caning they got in the 1990s when trying to implement road tolls, but no. Anyway, Williamson blurted out the Nats plan to have Public-Private-Partnerships (PPPs) fund road projects, which means:

  1. Direct tolls – you pay at a toll booth or by a tracking device in your car that bills you each time you use a toll road   OR
  2. Indirect tolls – the state pays with your taxes for each time the tracking device in your car goes onto a toll road.

Either way, we taxpayers pay for it. Question is – who do we pay?

PPPs are the worst form of privatisation! Traditional privatisation involves the state selling off all or part of the ownership in a state asset or operation. PPPs take several forms, but usually involve the BOOT model – the state ‘Buys’ construction of an asset, ‘Owns’ the asset, but lets a private company ‘Operate’ the asset (normally for 30 years -the useful economic life of most infrastructure assets), before the private company transfers the run-down asset back to state ownership, so it can be expensively rebuilt ready to start the cycle of fleecing the public purse again.

Overseas experience shows these PPPs are a disgraceful ripoff of public money. Reality is, the public invest all the capital and take all the risk, while a Private ‘shell’ company takes all the profit off the public, and laughs all the way to the bank, leaving the public to rebuild knackered assets.

To understand in a NZ context, think of our national rail system. ‘Normally’ privatised by National in 1993, owners Tranz Rail asset stripped and bled dry the network, while investing nothing in developing the business – many services were stopped under their incompetent mismanagement. Late owners Toll did not improve things, before the state bought it back in 2004.

If NZ Rail had been PPPed, the state would have retained ownership, but given Tranz Rail a 30year contract to run the rail. As part of ‘running’ the rail system, Tranz Rail would still have stripped and sold tracks for scrap steel, sold and leased back the Cook Strait ferries, etc, and paid out these ‘savings’ as dividends to the operator (Tranz Rail), and the public would still have had to invest $200m (and climbing) in rebuilding the track after we got frustrated enough with Tranz Rail’s failed operations to buy it back.

But, Tranz Rail would not have needed to invest the $300m capital that they initially bought NZ Rail for. This allows them to invest that cash elesewhere and make bigger profits. And with 20 years left on their operation contract, Tranz Rail would have been able to charge the state for buying out this contract (which based on their initial asset-stripping fueled profits, would have cost hundreds of millions). Nice – for Tranz Rai’ls owners.

The worst part is – Labour are just as bad as National on all this. Dr Cullen has enthusiastically supported PPPs, and said they are inevitable! And will apply to existing roads, so thy cannot even claim it is just to help Labour build new roads – they want PPPs to let their capitalist cronies make a viable profit from toll roads.

At this point it should be mentioned the infrastructure investing companies have spent the last 15 years planning & holding conferences, to try crack their way into profiteering from infrastructure assets. Isn’t it nice that both Labour and National are helping them so much? No? Didn’t think so. After all, it is us who will pay for it, which is what the companies always wanted – a permanent source of profits from the peasants…

And none of this even considers the human rights considerations. Recall those tracking devices in your car? They are the best method the road tolling enthusiasts have come up with to prevent us having to physically stop and pay at toll booths, like we used to on Auckland’s harbour bridge.

But of course they also offer the state – or worse, a private company – with the ability to surreptitiously track and moitor where people are. And that should give people even more shivers than they get from Google Earth trying to make maps with high resolution satellite images that show people going about their business. Effectively, it makes all of us inmates on a global form of home detention with electronic bracelets tracking us. None of this happens with straight state-owned, tax funded roads. Says it all really.

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Sprung! Nats caught plotting privatisations

August 3, 2008

This will probably be the biggest gaffe truth of the annual National Party conference – Nats finance spokesperson Bill English caught by TV3 on tape saying National will sell-off state-owned Kiwibank ‘eventually’ (i.e. straight after they feel they are safely ensconced in power permanently).

So much for ‘honest’ John Key & his merry band of corporate thieves men. For the National party trolls out there, forming and keeping Kiwibank state owned is good because:

  1. It gives Kiwis competition – a real choice between Oz owned banks that treat us with lousy customer service, and far better locals-focussed service from Kiwibank (and the credit unions). Weren’t National in favour of competition? Or was that not meant to include competition for your rich mates’ banking operations?
  2. It stops vast sums being siphoned offshore by the Oz-owned banks. This lowers NZ’s terrible balance of payments deficit, making our economy stronger.
  3. It strengthens our economy by retaining high-level banking planners/economists in the NZ economy. Oz banks can totally shift this offshore at any time; a domestic bank has no ability to use offshore head office staff to run the local bank.

The follow up questions for National has to be – what other state assets do you plan to sell ‘eventually’? The just-nationalised railways (Ontrack and Kiwirail) that ‘honest John’ was so disparaging about? Surely you wouldn’t sell our roads like you wanted to in the 1990s?

Of even more concern than National’s now exposed policies of privatising state assetts, or even borrowing to give tax cuts to the wealthy, is that of more public-private partnerships.

PPPs are the most dishonest form of privatisation – the state (us taxpayers) get to put up all the capital (and hence take all the risk), so some private company can ‘manage’ the assets’ operations for (typically) 30 years, while making a nice profit on the ‘management’. The company then ‘relinquishes’ the asset back to the state when its good and knackered from their lack of maintenance (increases the profits, dont’cha know?), leaving the taxpayer to fork out for extensively – and expensively – rebuilding the stuffed asset. PPPs have been such a winner overseas.

All premised on the ‘fact’ that the private management company is somehow ‘more efficient’ than state-run management, despite never having supplied proof of this assertion. No wonder National want to sell off Kiwibank – the last thing they want is this awkward reminder of a state bank out-performing their ‘superior’ free market chums…

And the Nats wonder why the Labour-types keep tagging wicked Prince John “slippery”.