| NO | ASPECTS | DESCRIPTION | ||||
| 4. | Available Sectors | To date, New Zealand PPP has been applied in the following sectors: • Education (schools) • Justice/Corrections (prisons) • Transport (state highways) Agencies that are planning any significant investment (including any arrangements with Local Government Authorities seeking Crown funding or support) must evaluate all procurement options, including PPPs, and it is therefore likely that PPP procurement will be applied in further sectors as relevant projects arise in the future. All PPP transactions utilise a two stage procurement process. An open Invitation for Expressions of Interest (EOI) is released publicly and EOI respondents are shortlisted to participate in the Request for Proposals stage. | ||||
| 5. | Eligible Tender Participants / Project Initiator | Consortia must include all parties required to deliver the scope of services. Proposals are required to be fully funded at the time they are submitted. All private sector business entities (domestic and international) are permitted to form consortia and respond to invitations for EOI. Private sector business entities may face competition in joining consortia but the Government does not impose any restrictions on participation. The New Zealand government prefers that consortia enter into arrangements with debt providers on a non-exclusive basis to provide liquidity during the proposal development stage. EOI evaluation is typically predicated on an assessment of capability and capacity of private sector parties to deliver the project. | ||||
| 6. | Types of PPP Structures/ Contract Types | In the New Zealand context, a PPP is a long term contract for the delivery of a service, where provision of the service requires the construction of a new asset, or enhancement of an existing asset, that is financed from external (private) sources on a non-recourse basis, and full legal ownership of the asset is retained by the Crown. The New Zealand PPP model is predicated on DBFM/DBFMO models which require the private sector contractor to design, build, finance and maintain the asset. Operational services may be included where appropriate to deliver the service outcomes sought from the project (DBFMO). DBFMO contracts are seen as more advantageous as they encourage greater levels of innovation in service delivery, increase the level of risk transfer to the private sector and reduce the number of interfaces that the public sector has to manage. | ||||
| 7. | Types of Project |
| Initiator | Sector | Asset/project classification |
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| Ministry of Education | Education | Schools (DBFM) |
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| Department of Corrections | Justice/Corrections | Prisons (DBFM & DBFMO) |
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| New Zealand Transport Agency | Transport | State Highways (DBFMO) |
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| 8. | Project Stages and Implementation for Solicited Proposals | The relevant government agency first prepares a business case recommending PPP procurement which must be approved by senior government Ministers (Cabinet). Market sounding activities are carried out with selected private sector participants in order to fully inform the business case. All PPP transactions then utilise a two stage formal procurement process. An open invitation for EOI is released to the public and up to three EOI respondents are shortlisted to participate in the Request for Proposals (RFP) stage. Proposal development occurs through an interactive tender process whereby respondents have the opportunity to meet with the procuring agency to clarify its requirements and test elements of its developing solution. These are formal structured sessions and conducted with high probity standards to ensure that no respondents are advantaged or disadvantaged. Final submitted proposals are evaluated (in accordance with evaluation criteria included in the RFP documents) and a preferred bidder is selected with whom final contractual negotiations are conducted prior to contractual and financial close. | ||||
| 9. | Project Stages and Implementation for Unsolicited Proposals | The New Zealand government recognizes that sometimes private sector parties have ideas that are unique, innovative and may be valuable to government, even though it may not be something that has been identified as a current need or priority. While the New Zealand government is open to unsolicited proposals, serious consideration will generally be given only to exceptional proposals that demonstrate unique concepts or benefits that cannot otherwise be obtained in the marketplace or that are only able to be provided by a single supplier, eg, as a result of IP or capability issues Unsolicited proposals will generally only be considered where they: • are unique • provide value or significant benefit to the New Zealand taxpayer, ie: - they address significant government needs, or - they offer more effective technical or service delivery improvement opportunities, or - they contribute significantly to the general economic development and well-being of New Zealanders • are not advance proposals for a requirement that has already been identified, and perhaps socialised in the market • are not readily obtainable in the marketplace • have been developed independently, without government assistance • include sufficient detail so that the government can assess whether it is worthwhile The above business case development would be required if the government were to consider any unsolicited proposal and consideration given to whether an open and competitive tender process was appropriate. | ||||
| 10. | Mechanisms to Engage Private Sector at Project Development Stages | As noted above, market sounding activities are carried out with selected private sector participants in order to fully inform the business case. These activities are structured and conducted in accordance with high probity standards. These sessions are used to provide information in relation to the project as well as testing elements of the project as it is being developed which is an important mechanism to elicit views from private sector parties in relation to the structure of the project, commercial terms and the proposed performance regime. | ||||
| 11. | Project Appraisal and Selection Process | Government agencies are required to consider the suitability of PPP procurement for all significant investments. The Treasury PPP Team is available to assist with this consideration. In New Zealand, PPP procurement has been implemented for the primary reason of improving the focus on whole of life outcomes delivered from infrastructure investments (rather than lower cost, 'on time, on budget' delivery, of financing purposes). PPP procurement is selected for projects where it offers value for money relative to conventional procurement methods, that is, where PPP procurement offers improved service delivery outcomes for no greater cost than delivering the asset and services through conventional methods. Specifically, three critical elements are tested to ensure the project will achieve value for money: i) market sounding: to ensure that there is sufficient market interest in the project as a PPP in order to drive a competitive process; ii) qualitative analysis: which compares procurement models based on the characteristics and objectives of the project; and iii) quantitative analysis: which tests whether the project offers sufficient scope for innovation and efficiencies to enable the private sector to offset the additional costs of procurement and finance. To ensure value for money is achieved, respondents' proposals must meet an affordability threshold that is published with the RFP documents. | ||||