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Latest school PPP contract's repeat clause

NZ Newswire logoNZ Newswire 8/03/2017 Paul McBeth

The government's latest public-private partnership contract to build six schools will include a clause putting the winning consortium at the front of a queue to repeat the package when the next bundle of buildings comes to market.

Education Minister Hekia Parata last week said the ShapEd consortium made up of the Morrison & Co managed PIP Fund II, Cimic Group's CPB Contractors and Pacific Partnerships, Southbase Construction, Spotless Facilities Services, ASC Architects and Oculus was the preferred bidder for a six-school build worth $220 million, and was sorting out the final contractual details with the ministry.

ASX-listed Cimic later went on to say the agreement was expected to include an expansion mechanism letting the Ministry of Education add additional schools to the project, with a capital value of $200 million.

The schools PPP is the ministry's third and provided the deal goes ahead, would mark Morrison & Co's involvement in all of them.

PIP Fund executive director Steven Proctor told BusinessDesk the ministry decided that the winner of the latest contract would be given the opportunity to deliver a second bundle provided the cost and quality of the first bundle was maintained.

That means the schools had to be shown that they would be built in a way that could be replicated on another site, and Mr Proctor says ASC's designs were key in winning the contract

Morrison & Co's first PIP Fund, which counts the New Zealand Superannuation Fund as a cornerstone investor, raised $176.6 million in 2010. It led the Learning Infrastructure Partners consortium that won the Hobsonville primary and secondary schools PPP in 2013 investing $10 million of equity.

The schools were designed as open learning environments and have been operating to expectations.

It also won the New Zealand Schools 2 project to build two schools in Christchurch, one in Auckland and one in Queenstown, requiring a $22 million investment.

The latest PPP is for three primary schools in Auckland, and the rebuilt and co-location of Shirley Boys High and Avonside Girls' High schools in Christchurch.

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