PPP: behind the scenesNovember 2013
Education Review asks Jason Wozniak of Aurecon about the decisions made and lessons learned from designing, building, and furnishing New Zealand’s first Public Private Partnership (PPP) schools at Hobsonville Point.
All eyes are on the gleaming new Hobsonville Point Schools, the first schools in New Zealand delivered by the Ministry of Education using a Public Private Partnership (PPP) procurement model.
The primary school opened at the beginning of this year and the secondary school is preparing to open its doors to the first intake of Year 9 students in 2014.
A PPP is when the private sector finances, designs, constructs, and maintains the school, including meeting the requirements of the output specifications, which detail the design requirements and service requirements (such as the condition of the asset and the cleaning regime). The principal and board of trustees are still responsible for the delivery of education.
Proponents of the PPP model say the benefits are that the board of trustees and school leadership can focus more on teaching and learning without the added responsibility of maintaining the school property. If the service requirements are not achieved then the consortium is not paid its full entitlement. The cost is fixed for 25 years, which provides cost and price certainty to the Ministry.
However, in the early days there was a fair bit of scepticism directed at the PPP in schools initiative. The Post Primary Teachers Association (PPTA) expressed concern that PPPs will lead to the increasing privatisation of state education in New Zealand. Others have been doubtful of the savings proposed to be made, especially when details of the Hobsonville Point deal were apparently too “commercially sensitive” to be released. That the partnerships are only as efficient as the governmental negotiations preceding them, has been a criticism of PPPs all along.
Despite the initial criticism, it’s a case of ‘so far, so good’ for the first PPP project in Hobsonville, with Jason Wozniak of Aurecon declaring the project to have been successful to date.
“The Hobsonsville Point project has achieved all of its milestones to date and has been delivered in an overall timeframe which ranks it as one of the fastest ever on an international scale.
“In terms of the processes, these have run more smoothly than anticipated. From business case stage and through procurement, the Ministry defined a very clear delegation and approvals process. This documented what, when and who was required to approve the various stages of the project.
“The private sector was also keen to be involved and there was strong interest to participate in the project. This assisted in meeting the challenging timeframes.”
Sticking to budget is of key importance. Wozniak confirms the budget of $113m (net present value) was provided to the consortiums at the tender stage and the Ministry assessed that the requirements (output specifications) could be delivered for this amount.
“The key issue for the consortiums was to deliver the requirements for the budget (they are minimum requirements), and therefore, there was the opportunity to add extra value if they were able to identify innovative and whole-of-life solutions.
“Management of the project agreement remains with the Ministry – ensuring that it receives the requirements as per the output specifications. It is the consortium’s responsibility to manage their costs in meeting the requirements. Any incorrect assumptions or errors and omissions are the consortium’s responsibility.”
Designing a school
The basis of the PPP is the output specifications. Following an expression of interest process, the Ministry invited three consortiums to respond to the Request for Proposal (output specifications).
Wozniak says the output specification lists the requirements – not the solutions.
“The Ministry did not dictate the size and layout of the classrooms or outdoor spaces, it asked for solutions that responded to the proposed method of delivering the curriculum. The output specifications were aligned to the Ministry’s school property calculator that determines the indicative overall size and the functions required.”
The Ministry worked closely with the board of trustees to establish their vision for the school. This vision was then translated into an education brief that helped define the output specifications.
“The key difference is that the board of trustees was not asked what the classrooms look like but rather how they wanted to teach. After the teaching method was established (e.g. group learning, project spaces), we were able to define the output specifications,” says Wozniak.
“During the tender phase, there were interactive tendering sessions that enabled the Ministry to provide comments on the concept designs presented by the consortiums. Bidders were also able to ask questions about whether their designs enabled the functionality. This addressed issues like size and relationships of space. Feedback (positive and negative) was provided that enabled the bidders to adjust their designs.”
ICT and classroom furniture: who decides?
The scope delineation between the consortiums requirements and the schools requirements are quite clear.
“The consortium is responsible for installing the ICT Backbone Infrastructure,” says Wozniak. “The school determines what it wants to run on the infrastructure.”
“In terms of furniture, all fixed and loose furniture is provided by consortium. The key rationale for this approach is to ensure that the design is coordinated between the building and the equipment. There is a real risk that a building can be designed in a particular way and then unsuitable furniture (often that looks and functions well on its own) does not suit. This overcomes that issue.
“The board of trustees has the opportunity to make comment on the equipment and a number of refinements were introduced as a result of this feedback. All of the equipment is provided at the commencement of operations.”
All furniture must comply with the Australian and New Zealand standards and a number of other performance criteria.
Wozniak says one of the most challenging aspects has been ensuring that the key project messages are understood by all of the stakeholders.
“Many of the stakeholders make assumptions about what they consider a PPP to involve. These assumptions are often incorrect. The biggest error has been that many people believed that ‘education was being privatised’. The consortium has no responsibility for delivering the curriculum and all student responsibilities remain with the board of trustees and school management.”
Even so, the PPP procurement model represented a significant shift in responsibilities from the Ministry to the private sector and Wozniak describes this as the biggest challenge.
“It has taken a significant amount of effort for all parties involved to learn and understand their roles and responsibilities. This outcome should now provide a positive base for the future.”
Indeed, while Hobsonville Point has been a successful pilot for future PPP school projects, the Ministry has learned much from the experience. A ‘lessons learned’ log has been maintained by the Ministry throughout the duration of the project.
Wozniak says the key issues that will be reviewed in the event that the Ministry undertakes another PPP are:
- Minimising the bidding costs of the consortiums;
- Ensuring that the interactive tendering process maximises the feedback opportunities;
- Providing time for additional involvement of the board of trustees and school management into the tender and design review stages.
So it appears the Ministry has successfully cut its PPP teeth on the Hobsonville Point schools, delivering the project on time and to budget, managing to quell concerns, and inform relevant parties about how it all works. Now the reins are passed to the school leaders and board of trustees to define the Hobsonville Point schools in terms beyond ‘public private partnership’.
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