John Key's salesmanship will soon be put to the test as he promotes the sale of minority stakes in blue chip state-owned enterprises to fund future investment in vital new infrastructure.

The partial privatisation of four infrastructure companies through a "mixed ownership" model has been decried as "selling the family silver" by National's opponents.

But the Prime Minister is adamant that National's intention to sell down up to 49 per cent of Mighty River Power, Meridian, Genesis Energy and Solid Energy will be based on a solid mandate assuming voters return him to power at the November 26 election.

The Government's decision to free up equity for reinvestment through selling shares in mature companies is also likely to be adopted by forward-thinking local authorities.


The latest National Infrastructure Plan does not directly canvass the option.

But behind the scenes, Cabinet Ministers and their officials are blunt that big cities - particularly the huge Auckland Council - need to work their own balance sheets hard and look at flexible funding options before coming to central Government for major funds injections to bankroll big ticket infrastructure items.

Mighty River Power chief executive Doug Heffernan says the planned move will also free up the SOEs to acquire additional private capital to underwrite new investments - something that is currently difficult, given the pressures on the Government's budget.

For major construction firms like Fletcher Building and other members of the alliance which is poised to rebuild Christchurch's infrastructure in the wake of the February 22 earthquake, the 6.3 quake has ensured continuity of work at a time when the industry has been under pressure.

Initial fears that the Government might turn-off the funding tap, or substantially delay some major Auckland projects, have been allayed.

Which is just as well, as there is little gas left in the private sector's tank when it comes to funding new developments.

As Auckland readies itself to slap on the lipstick for the upcoming Rugby World Cup, construction firms are asking what's next in the pipeline as they tick off major projects ranging from stadiums, to roads, entertainment and events centres all of which have been completed on time for the arrival of the rugby fans.

Major firms like Fletcher Construction, Leightons and Hawkins have managed to hold a substantial portion of their workforces together despite difficult times in the construction sector over the previous three years.


A lot has happened in the public infrastructure space.

Fletchers and Leightons, who are each part of rival alliances, are waiting to hear which group will win the tender for the biggest and most complex roading project ever undertaken in New Zealand - the Waterview connection.

Up to 1000 people are expected to be employed at the project's peak laying two three-lane road tunnels stretching a total of 2.5 km.

It will be a toll road and is expected to shave off considerable time for cars driving the route between Auckland's CBD and the airport.

The Government forged a deal with Sky City which will underwrite the costs of a new international convention and exhibition centre in Auckland in return for Sky being allowed to expand its casino business.

Three consortiums are waiting to see which of them will win the contract to build a 960-bed prison at South Auckland's Wiri. It will be a public private partnership.

Construction companies expect the timing of the Rugby World Cup will contribute to a predicted slowdown because the Auckland Council doesn't want major civil works hindering thousands of visitors getting about the city.

But irrespective of the grumbles, Auckland is really sprucing itself up to show off the city's best features for the World Cup which gets under way next month.

The outskirts of the Wynyard Quarter - commonly known as the "tank farm" because of the big fuel, gas and chemical tanks sited there - has been transformed into a new marine village with a working waterfront, plenty of public space, parks and promenades, an events centre, connecting walkways, trams and cycle bridge.

It was opened by the Prime Minister on Saturday.

* * *
Three year action plan
* Publish 10-year capital intentions plan
* Have a debate on demand management and pricing
* Better information on performance.
* Performance indicators (central and local government).
* More spatial plans for metropolitan areas.
* Improve scenario modelling.
* Learn lessons from Christchurch and build in resilience.
* Explore alternative funding tools.