NZ firms advise on $298m deal

A number of NZ and Australian firms have advised on a significant $298m contract.

NZ firms advise on $298m deal
The New Zealand Government has signed a $298m contract with the Future Schools Partners (FSP) consortium to build and maintain four schools as part of a Public Private Partnership (PPP).

Bell Gully acted for the New Zealand Government, Anderson Lloyd acted for FSP, and DLA Piper Australia advised Hawkins Group Limited, who will design and construct the new facilities.

Herbert Smith Freehills also advised Programmed FM, while Minter Ellison Rudd Watts advised the banks in the deal.

Bell Gully partner Hugh Kettle said the team acted for the Ministry of Education on its first PPP - the Hobsonville Schools transaction - and has acted for the Ministry of Education, Department of Corrections and the Transport Agency on all the Government’s PPP projects to date.

He told NZLawyer this will be the largest schools-based PPP to date and the first in New Zealand to involve a number of facilities spread across the country: Aranui School (Christchurch) and Rolleston Secondary School (Canterbury), Wakatipu Secondary School (Queenstown) and Ormiston Junior School (Auckland).

“The nature of PPP projects involves long periods of concerted effort by the procuring agency, Treasury, the private sector parties and their respective advisors, so reaching financial close is always a significant milestone.

“It’s always good to be involved in projects that will see a real lift in the provision of public services. The design process, in which the schools are involved, ensures delivery of top quality modern learning environments, and the facilities management arrangements remove property concerns from the school staff and allow them to focus on education.”

Kettle said it was the fourth to reach financial close since Treasury introduced New Zealand’s PPP framework and model contract in 2010.

“The earlier projects involved a much greater level of negotiation and structuring as the model bedded down.

“This project showed a clear move towards the standardisation that Treasury are seeking, with the reduction in transaction costs and procurement time that this brings – it is good to see the market participants having effectively bought in to the New Zealand model and assisting in this standardisation.”

Anderson Lloyd partner David Holden said his team – previously of Russell McVeagh - is recognised as the market leader in advising private sector consortiums on New Zealand public private partnership projects, and has advised consortia on all New Zealand PPP projects to date (having advised the successful consortia on the two Schools PPPs and the Wiri Prison PPP and is advising the preferred bidder on the Auckland Prison PPP).

The team was led by Holden and fellow Auckland-based partner Geoff Busch, assisted by their teams and various other specialist teams within Anderson Lloyd.

One significant aspect about the contract was that it was the first NZ PPP project with a national scope, with schools being built in multiple locations thorough New Zealand, Holden said.

“The nature of the project across multiple sites and the bespoke insurance arrangements created additional complexity across the suite of documentation,” he said.

“It was a team effort, not just within Anderson Lloyd but also the other firms involved.

“These deals require a close working relationship across all advisers; as the parties (and the majority of advisers) had worked together on the successful bid for the Schools 1 PPP project, this common understanding enabled issues to be worked through quicker and more efficiently.”

DLA Piper Australia partner Alex Guy said the firm previously acted for Hawkins Group in relation to the Hobsonville Point Schools PPP.

“The New Zealand Schools II PPP Project follows the success of the Hobsonville Point Schools PPP. The project demonstrates the confidence that the parties have in the PPP model and the benefits of this project structure."

The project will provide better educational facilities and deliver a quality learning environment for New Zealand students, Guy said.

“We are very pleased to have had the opportunity to work with Hawkins Group again and to be part of this important project for the Auckland, Christchurch and Queenstown communities.”

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