Wednesday, February 18, 2009

What privatisation can do

Remember the Ministry of Works? Built roads and dams, maintained them too. The stereotype of an expensive, not very clever, lazy organisation.

It became Workscorp under Roger Douglas, you know that man that terrifies National and Labour so much with all those policies he implemented that neither have reversed. In 1996 the Nats sold the consultancy arm to a Malaysian firm, which invested in it Now it is one of New Zealand's most successful companies exporting services under the name Opus. Its head office is in Wellington, still.

The NZ Herald notes:

"Infrastructure consultant Opus International Consultants has exceeded expectations with increased revenue and profits, up around 25 per cent for 2008.

Revenue was $371.5 million, up 25.4 per cent on 2007, and the net surplus after tax was $17.5 million, up 23.4 per cent, for the year ended December 31, 2008, the company announced to the stock market today"

"Business acquisitions in the United Kingdom and in Canada increased Opus' total staff from 2236 to 2563, and it now operated from 81 offices world-wide."

Could you have seen Workscorp doing that, let alone the Ministry of Works?

Hardly.

Given some SOEs are world class in their field (e.g. Airways Corporation, NZ Post) you might wonder how, with private investment, some of our constrained state owned enterprises might perform if let off the leash. Ironically, with the money governments are pouring into infrastructure, as a panacea to recession, Opus is probably a company in one of the best places to grow from strength to strength.

Good job Roger Douglas ignored Jim Anderton. Good job Jim Bolger ignored Helen Clark, Winston Peters and Jim Anderton - and frankly the majority of you out there.

Yes, it is Malaysian owned, but almost its entire management is New Zealand based, and much of its staff are New Zealanders.

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