Two articles that point towards what I see as a general issue in NZ... corporate laziness. The first addresses the Transmission Gully Project and the tendering process uncovered in the review of the project...
https://www.stuff.co.nz/national/politi ... ns-of-cost
The AT is calculated based on another number, the PSC (public sector comparator) which is the number given to what it would cost the public sector to build and run a given project. This ensures the government is getting value for money by using private partners to do government projects.
In the case of Transmission Gully, the AT that was put out to tender was at a much lower cost than what it was believed the public sector could deliver the project for. Set at P75 for the public sector price, that meant there was a 75 per cent probability of the public sector building and running Transmission Gully for the price that it was put out to tender.
An old Waka Kotah-NZTA board paper dug up by the reviewers found that the AT was set lower than the PSC “to drive the Respondents' behaviour in the achievement of innovation and efficient whole of life solutions”.
But the bidders weren’t so keen. One interviewee called the price “demonstrably unrealistic”, and another said that it was “dubious” whether it actually achieved value for money for the Crown.
Setting the tender price so low meant firms were tendering for a project knowing that it was unrealistic to be able to deliver it at that cost. The review noted that setting the price low essentially “double counted” cost savings because the public sector figure was already required to consider the most efficient and cost-effective way of doing things.
Some of you who like to moan and carry on about the current govt being incompetent or unable to deliver may want to take a deep breath and absorb that for a while.
https://www.rnz.co.nz/news/business/440 ... ies-report
The Productivity Commission has released its findings into what are known as frontier firms, the top 10 percent.
Productivity Commission chair Ganesh Nana said a mere 30 companies accounted for over half of all exports from this country.
He said New Zealand needed to focus its efforts more or it risked falling further behind.
"To prove our innovation and I suppose the critical thing is our exporting capabilities ... let's focus on exporting distinctive products that can't be imitated elsewhere rather than focusing on volume of commodities which can be imitated elsewhere."
The Productivity Commission in its latest report said New Zealand was becoming less competitive which made it harder to maintain and improve the wellbeing many want and expect.
It compared the country's top 30 companies with those in other small advanced economies, such as Denmark and Singapore.
Nana said the focus must be on innovation and moving away from volume to value-added products.
''Let's grow some big frontier firms, let's grow what we call those anchor firms that will enable a lot of the smaller firms to develop underneath that canopy ... that is the missing element.''
New Zealand companies needed to become more productive to be able to compete globally.
Nana said New Zealand was becoming less and less competitive which affected everyone.
"This is not productivity just for productivity's sake and this is not productivity for profitability's sake, this is productivity to enable us to deliver the wellbeing for future generations and frontier firms is a critical part of that jigsaw puzzle."
What I see going on here a lot is those few really large corporates operating here have got themselves into a market position where they're not competing, they're maintaining market share. It's lazy, because it's easy money... but it's finite. That sort of dynamic feeds a boom / bust cycle. The reason I've linked the Transmission Gully project under the same topic is that there was a seriously flawed, naive or lazy process that underpinned the tendering for that project and it suggests, to me anyway, a culture of short cutting... taking an easy option instead of putting the work into setting up a quality project.
It's all too easy when you're being sponsored by policy to dominate or monopolise. It's time for a revolution, folks...