The Government says public private partnerships for building new schools may not happen if they don't provide enough value for money.
Official documents released to Radio New Zealand show that a 30-year contract for building and maintaining a public private partnership (PPP) school would save taxpayers only about $800,000.
The report, commissioned for the Ministry of Education, shows there would be significant risks with PPPs, including the possibility the ministry doesn't have the capability to run the projects successfully.
It also says negative reaction from the education sector would affect the rolling out of National Standards and collective bargaining agreements.
Setting up the first PPP contract for a school would cost about $6 million.
But Education Minister, Anne Tolley, says the report also showed there were other benefits, such as time saved for boards and principals.
Finance and Infrastructure Minister Bill English says the partnerships will only be carried out done if there is significant value in them for the taxpayer.
He says the investigation of PPPs in the public sector has been more beneficial than expected and has led to significant changes in the management of prisons.
The second stage business case for PPP schools will go to Cabinet in March.
The Labour Party says the costs of private public partnerships for new schools would be a lot higher than estimated in the report.
Education spokesman Trevor Mallard says the costs of setting up the contracts is overly optimistic as the ministry has no expertise in running PPPs.
Mr Mallard says it is cheaper for the Government to fund new schools, as it borrows money at a much lower rate than the private sector.
