NO

ASPECTS

DESCRIPTION

12.

Facilities Available to Facilitate Project Structuring and Transaction Advisory

Significant government resources are committed to the procurement process, however no financial support is provided directly to private sector parties participating in a PPP procurement process. On a case by case basis, contributions to design development costs may be paid to unsuccessful respondents for the purchase of intellectual property.

In the specific case of the New Zealand Transport Agency, a crown indemnity has been provided in respect of cash flows due to the Contractor for a state highway PPP. This support was required due to unique factors specific to the Transport Agency's funding model.

13.

Role of Local Government

Local government bodies have not yet implemented PPP procurement. However analysis specific has been commissioned regarding the suitability of PPP procurement to local government infrastructure projects. The Treasury PPP Team is committed to working with local government bodies to consider and implement PPP procurement where appropriate.

14.

Risk Sharing Policies/ Practices

Risks are transferred to the party best placed to manage and mitigate those risks. Risks are allocated on a project specific and case by case basis. However, for illustrative purposes the private sector will generally bear all design and construction risks and availability risk. The Crown generally retains demand, resource/environmental consenting and specific change in law risks.

15.

Financing Mix Options Allowed

New Zealand PPP transactions to date have featured a mix of senior bank debt (on a non-recourse basis) and equity financing. The projects are generally highly geared to provide maximum efficiency. Senior debt terms observed to date are for a period of five to seven years between refinancing points. Lenders' debt margins are based on floating interest rates, with the government entering into long term interest rate swaps through its own separate arrangements. However, the government welcomes cost-effective longer term debt solutions if these can be provided by the private sector.

16.

PPP Promotions/ Marketing Mechanisms

Potential projects are socialised with known potential private sector participants as early as practicable. As noted above, market sounding activities are conducted during business case development and invitations for Expressions of Interest are released and advertised publicly. The Treasury PPP Team welcomes enquiries from interested international parties.

17.

Monitoring and Evaluation

Procuring entities appoint Contract Managers to each project who monitor and evaluate the performance of the project , both in absolute terms and relative to other assets/projects in the procuring entity's wider network. One of the principles of PPP procurement in New Zealand is that procuring entities will learn from private sector innovation in asset design and service delivery, thus leveraging the benefits of single PPP projects. The Treasury PPP Team monitors contract management and performance over time to ensure that these benefits are being derived.

18.

Dispute Resolution Mechanism

The New Zealand Standard Form PPP Project Agreement contains provision for Disputes Resolution through the establishment of a Disputes Panel to consider any disputes which may arise.

This Panel consists of four members, two appointed by each of the Crown and the Contractor. Where a unanimous decision cannot be reached within the allocated timeframe either party may elect to submit the dispute to an Accelerated Dispute Panel which consists of up to three independent experts nominated by selected professional services organsations LEADR (Lawyers Engaged in Alternative Dispute Resolution), NZICA (New Zealand Institute of Chartered Accountants), and IPENZ (Institution of Professional Engineers New Zealand).

Resolutions of the Disputes Panel and/or determinations of the Independent Expert under the Accelerated Disputes Resolution process are final and contractually binding on the Crown and the Contractor.