Progressing the Waterview Connection as a Public Private Partnership: Report of the Waterview Connection Procurement Steering Group

26 June 2008

An Investigation of the Value of a Public Private Partnership

To: The Hon Dr Michael Cullen, Minister of Finance, and the Hon Annette King, Minister of Transport.

The Waterview Connection Procurement Steering Group is pleased to present our Report into progressing the Waterview Connection as a public private partnership as requested in the Terms of Reference released on 7 February 2008.

Waterview Connection Procurement Steering Group

Sir Brian Elwood - Independent Chair
Elizabeth Anderson - Ministry of Transport
Michael Barnett - Auckland Chamber of Commerce
Mike James - Deputy Secretary, The Treasury
Stephen Selwood - New Zealand Council for Infrastructure Development
P hil O'Reilly - Business New Zealand

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Foreword Executive Summary Introduction Steering Group Membership The Waterview Connection Project The Investigation Legislative Framework Land Transport Management Act 2003 Resource Management Act 1991 Assessment Criteria and the Public Sector Comparator Public Sector Comparator Procurement Options Conventional Procurement Design and Construct Alliance Fixed-price/Turnkey PPP Procurement PPP Payment Mechanisms Conclusions Comparing Conventional Procurement to a PPP Critical Success Factors The Most Efficient Conventional Procurement Method The Most Suitable Form of PPP Risk Allocation Payment Mechanisms The case for a PPP for the Waterview Connection Whole of Life Cost Savings Benefits for Road Users Access Additional Revenue Sources Cost Estimation Benefits to the Wider Community Contracting Costs Cost of Contract Variations Contract Enforcement The Waterview Connection by 2015 The Value of Private Sector Finance Legal feasibility of a PPP for the Waterview Connection Market Appetite and Capacity Price and Cost Certainty Appendix 1: Terms of Reference Appendix 2: Summary Assessment Table Appendix 3: Other approaches to assessing value for money List of Tables Table 1 - Assessment Summary Table 2 - PPP Payment Mechanisms Table 3 - Description of Risk Categories Table 4 - Indicative Timeline for a PPP Appendix 2: Summary Assessment Table \| Pros Appendix 2: Summary Assessment Table \| Cons Appendix 2: Summary Assessment Table \| Other Criteria List of Figures Figure 1: The Public Sector Comparator Figure 2: Illustration of our findings for the Waterview Connection Figure 3: Estimated cost and Outturn Cost Compared - Conventional vs PPP procurement Case Study Case Study 1 Case Study 2 Case Study 3 Case Study 4 Case Study 5	wcpsg-report-26jun08.pdf (568 KB) pp. 1–48

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