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Stuck in a Rut

category aotearoa / pacific islands | economy | opinion / analysis author Tuesday November 07, 2017 10:45author by Pink Panther - AWSM Report this post to the editors

The Perils of Public Private Partnerships

This article addresses the issue of Public Private Partnerships (PPP) in the context of major roading infrastructural work undertaken in Aotearoa/New Zealand, with some comparative reference to the Grenfell Towers disaster in London.

On October 26th, it was reported (stuff.co.nz) that two sections of the Waikato Expressway had experienced problems with rutting. Rutting is when grooves appear in a road where the wheels of vehicles run along. It is a problem normally associated with dirt roads and tracks rather than a modern multi-carriage roadway that had only been completed in December 2012 (in the case of the Te Rapa section) and opened in December 2013 (in the case of the Ngaruawahia section). This comes only four months after it was reported that the Kapiti Expressway in the lower North Island, which opened in February 2017, had major issues caused by the failure of the waterproofing of the roadway. Both Expressways were constructed as part of the 2008-2017 National-led government’s much vaunted Roads of National Significance that were designed to improve key stretches of the state highway network that had been neglected for many years by successive governments.

The explanation given by Peter Simcock of the NZ Transport Agency for the rutting problems on the Waikato Expressway was “While we did challenge the designs … we received all the assurances from their experts – and they were recognised paving experts – that they would perform.”
As far as the cause of the Kapiti Expressway’s problems were concerned the explanation given by NZTA Highways Manager Neil Walker was “It’s too early to say what could be causing these changes, but we are monitoring the condition of the surface at these locations very closely in order to determine whether any remedial work will be required.”

No matter how one looks at the issue, the failure of two major prestige roading projects is not a good look for any government or the companies involved with the construction of the Expressways (Fulton Hogan and Opus Consultants in the case of the Waikato Expressway and Fletcher Construction and Higgins Contracting, and engineering consultancy Beca in the case of the Kapiti Expressway). It also exposes a major flaw with the Private Public Partnership (PPP) arrangements that are often used in infrastructure projects.

A PPP is defined by Wikipedia as: “A public–private partnership is a cooperative arrangement between two or more public and private sectors, typically of a long-term nature.” In plain English, the government contracts out a particular infrastructure project to private companies who then sign a contract about what is to be done, when it is to be done and how much it is expected to cost. In theory PPPs’ are meant to be more cost effective and reduce the costs placed upon governments. In practice, as has been seen with the Expressways, they are plagued with problems. Part of the problem lies with the tendency to tender out contracts to companies who are either very cosy with the government (as in the case of Fletcher Construction, which has a history of working with the state that goes back to the depression of the 1930s’) or who are well known for doing things on the cheap (as in the case of Fulton Hogan), often through the use of subcontractors.

While it could be argued from a financial point of view that there is nothing wrong with this kind of thing, the Grenfell Tower fire in London in June 2017 proved that such arrangements can have deadly consequences. When the Royal Borough of Kensington and Chelsea Council tendered contracts for the Grenfell Tower renovations the company that won the contract was Rydon. However, there were at least eight other contracted and subcontracted companies involved in the renovation project. Not only was there little or no oversight over which contractor or subcontractor was responsible for their particular area of expertise but it proved be an administrative nightmare with each company deploying their own teams of experts, design teams, project managers, workers and administrators. With virtually no one responsible for overseeing what was going on the Grenfell Tower effectively became a death trap even before the renovations had been completed. (The Guardian, June 15th, 2017.) The renovations would later be listed as a major contributing factor in the deaths of at least 80 people in the fire.

The many companies that are involved in Private Public Partnerships, raises questions not only as to safety but accountability. Who is held to account when things go wrong? In the case of the two Expressways the government, the NZ Transport Agency and the various private contractors have blamed each other and the weather for the problems but, as of the time of writing, no one has stepped up and stated they had not done their job properly. More telling is that no one has been held to account for the failures that have already occurred on the Expressways within the short time they have been open.

In regards to the Grenfell Tower fire the sheer number of companies involved in the renovations has created some serious accountability and safety concerns. In the above quoted article in The Guardian one fire safety expert highlighted concerns:
“Ben Bradford, a fire safety expert who is managing director of the risk consultancy BB7, said the multiple links in the chain of contractors could cause safety problems. “There’s probably multiple failings that have occurred in this particular case,” he said. “The work, in terms of fire stopping, often falls to a sub-contractor. They don’t always realise the critical nature of the components they’re installing in the overall system.”
He also claimed that the partial privatisation of the building inspection regime sometimes led to a “race to the bottom” to reduce fees and limit the number of safety inspections carried out.”

In the past mistakes would occur on projects, but at least there was a clearer chain of command and it was a bit easier to know where to point the finger if things went wrong. However, with the development of PPPs’, that chain of command is not only confusing but it’s often nearly impossible to hold anyone to account when things go wrong.

It is true that construction by a PPP can be done faster in some cases than previous models. The Kapiti Expressway was completed four months ahead of schedule for example, but the consequences can be both expensive as in the case of the Waikato and Kapiti Expressways, and deadly as in the case of the Grenfell Tower fire in London.

Regardless of how it is packaged and labelled PPPs’ have largely combined the worst aspects of governments and the corporate sector and the biggest losers in this latest trend are the working class and the poor. More often than not it’s their taxes that largely pay the corporate sector to build these projects which, for the most part, do not benefit the people who suffer the most inconvenience and disruption to their lives.

In the case of the Grenfell Towers the renovations were largely undertaken to make the building look more attractive to the surrounding neighbourhoods, which include some of the wealthiest people in the United Kingdom, rather than for the benefit of the residents. In the case of the Kapiti Expressway it was mostly constructed to benefit truck drivers rather than the people of Kapiti, at least according to the opponents of the Expressway. (Wellington Scoop News – October 1st, 2009)

An article in the Anarchist Library dated September 2nd, 2011, summed up private public partnerships perfectly:

“What is the dream of every private company? To register large profits, constantly during the length of time and without risk. … The ingenious private-public partnership (PPP) cannot be seen in any other way: a passing of public money to … large private contractors, with no apparent benefit for the State.”

There is a need to explore alternative models that are more efficient, have more accountability, consider the environment and local infrastructural needs and also eliminate the role of private greed and the cosy relationship between the government and the private sector. As Anarchists we are open to discussion about what specific shape that might take. We are also realistic in recognising there will never be a perfect approach to these issues. Nevertheless, we do think our methods can do a much better job in tackling the questions of how to make such major decisions as whether, when and how to build basic infrastructure. Generally we see a decentralised and eco-friendly economy, allowing for genuinely democratic community control combined with a federalised means of co-ordinating large scale projects, as the basic idea of running society. We believe that would go a long way to eliminating many of the difficulties of the current system and get us out of the rut we are all in.

Also see: http://www.awsm.nz/2013/07/02/road-to-somewhere-protest...orua/

Related Link: http://www.awsm.nz/2017/11/07/stuck-in-a-rut-the-perils...hips/

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