12 Aug 2010

Sharemarket boost tipped from PPPs

9:02 am on 12 August 2010

Backers of a move by the Government to use more Public Private Partnerships (PPPs) say it could boost the New Zealand sharemarket.

Government projects, ranging from schools to roads, costing more than $25 million, now have to be considered for PPPs.

The Goverment hopes their increased use will create more savings on $30 billion worth of projects planned for the next five years.

The head of the Government's Capital Markets Taskforce, Rob Cameron, says PPPs could create assets for domestic investors worth billions of dollars.

But Paul Newfield of the investment firm Morrison & Co, which plans to invest in PPPs, expects most interest to be foreign.

CTU view

The Council of Trade Unions says the financial gains to be made from PPS are very small.

CTU economist Bill Rosenberg told Morning Report that financial savings of only about 2.6% are possible for schools under such a model.

He said the CTU has no objection to schools being built by private contractors, but their ongoing control was an issue.

Mr Rosenberg said long-term infrastructure bonds should be considered ahead of public private partnerships.