Cabinet dispensation required to reject partnership model

David Clark.
David Clark
Cabinet dispensation was required for the Minister of Health to rule out a public-private partnership to build the new Dunedin Hospital, a newly released Cabinet paper says.

Cabinet decisions on all significant projects such as the rebuild require all options, including PPPs, to be considered.

The Cabinet paper presented to his colleagues a fortnight ago by Health Minister David Clark, with its recommendation that the Wilsons-Cadbury block be the new site for the hospital, also sought an exemption from the requirement to consider a PPP — which was granted.

"I will, however, expect officials to take into account learnings from PPPs elsewhere when developing the commercial case for this project," Dr Clark said.

Dr Clark told Parliament last week that he expected to take the business case for the rebuild to Cabinet this year.

Given Labour campaigned against PPPs in the run-up to last year’s election, Cabinet ruling out private sector involvement in owning the rebuilt facility was a given.

At the site announcement, Dr Clark said the Government had $42 billion set aside for capital projects and private money was not needed.

"It would cause delays, and as Mayor Sadiq Khan of London has said, their public-private partnership hospital is a millstone around the neck of Londoners.

"They can go wrong, they require a lot of extra planning, and we’ve decided in a situation which is pressing, just to get on and build the hospital."

Act Party leader David Seymour said dismissing a PPP without consideration was a  purely ideological decision by the Government.

"It has disregarded the advice of Treasury who said that ‘a PPP should remain under active consideration’ because it ‘enforces best practice’, provides ‘opportunities for innovation’ and ‘limits the risk of construction cost overruns’.

"New Zealand needs greater private sector involvement in our health system to ensure New Zealanders get the best possible health services for their tax dollars."

mike.houlahan@odt.co.nz

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