When structural inefficiencies prevent successive governments from effectively maintaining public infrastructure: a star is born.
I’m guessing the idea here is that they pick up government contracts for infrastructure work?
I’m curious how this works in practice, they would subcontract the work? Why wouldn’t the people offering the contracts just go straight to the subcontractors, maybe Simplicity are bringing project management skills that they have build up with their work of large subdivision projects?
New Zealand seems to have an aversion to accountability.
The amount of places I’ve worked or people I’ve talked to whose employers throw money at consultants to act as a buffer when things go tits up is absurd (doubly so the amount that get fired when they’re not reporting back what the employer wants to hear).
But with that ingrained culture, surely it must create an opportunity? Be a middleman for projects. Be the person to cop the blame when budgets blow out.
InfraKiwi aims to own and operate key infrastructure assets in New Zealand for the long term. It is anticipated that it will initially be seeded with private equity investment from the Simplicity KiwiSaver and Investment Fund schemes, with the intention to list on the NZX once it achieves critical mass.
It sounds more like they will “own” the resources, not just do contracts. I’m not very good at 4d-chess but one thing that popped into my mind was the Lake Onslow Project. Then I started thinking about Electricity Generation. So, there might be a world in which things that could be SOEs in the future are owned by a Kiwi business. If InfraKiwi is listed on the NZX, then it could be folded into a “fund” that is available for everyday people to buy using their KiwiSaver.
This would be quite complimentary to Labour’s new Future Fund, so if Labour win the next election, InfraKiwi could be well positioned to work within that framework and receive government money from “Investment Fund schemes”. Labour said:
The Fund will invest in New Zealand for the benefit of everyone, building infrastructure and backing innovative businesses to create secure, well-paid jobs and grow wealth in every region.
InfraKiwi almost seems tailor-made for this. While it would need to be a for-profit company to be listed on NZX, the convenor company “Simplicity” has done some amazing pro-Kiwi things as a not-for-profit which gives me a high-level of trust for their CEO: Sam Stubbs.
A so they don’t build for the government, but more a public private partnership where the government contracts they to provide the service rather than to build the infrastructure, then the Simplicity company sells the service to cover costs and make the profit?
I think I’d prefer state owned, but this does seem like a good compromise compared to some overseas owned company. And I guess the government can’t sell them off to fund tax cuts.
