Thursday, 19 July 2012

Sleeping During The Day

The government have budgeted to spend another $200million on investigation and design for roads in the next four years.

Back in 1996 the then National Government approved the sale of the old Ministry of Works for an estimated $108million.  Of that, about $45million was for the part that does investigation and design for roads, amongst other things.  Skip ahead 16 years and what became of that part is listed on the sharemarket, worth about $100 million and returning around $20million a year on the investment.


In the spirit of the Mixed Ownership Model, the government must be considering a 51% stake.  Surely.


It's not like the work disappears, there's an average of $50 million a year.  Coincidentally that's about the same price for the aforementioned 51% stake.  Sure, the companies that are contracted to do the work change from project to project.  But the truth is that companies get very little done; all the work is done by people.  When a company runs out of work, its staff move to a company that has work.


That is to say, it's pretty much the same people doing this work.  They spend a few years training at university, and decades getting the experience, and they can't and don't just go and do something else when their company can't win enough work.  They go to the company that won the work.


Or they go to Australia, and we lament the loss of skilled people overseas.


Mint Chicks - Crazy? Yes! Dumb? No!, 2006


FOOTNOTE
In one of the links above, the Ministry of Works was described, in a letter to the Herald in 1996, as follows:
"… an organisation that was instrumental in building an infrastructure second to none for a country of this size, and the envy of overseas agencies…No more will we have an agency able to respond immediately to natural disasters with the technical resources to cover anywhere in the country; provide apolitical advice to Government ministers free from any vested interests; provide the standards and technical advice for other departments (including the Department of Conservation), local authorities and the private sector; provide a first-rate training ground for technical personnel; and maintain a workforce in all rural areas that are part of the overall national scene."
Would the response to the earthquakes in Christchurch have been better with a Ministry of Works?  We can only guess, so I will.  It is my opinion that it would definitely have been better.

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