Feasibility studies soak up $50m

Almost $50 million of Provincial Growth Fund (PGF) money has been allocated for more than 100 business and feasibility studies nationwide. And, according to information provided by the Provincial Development Unit — the Government entity which dishes out the $3 billion pot — just 10 per cent of what has been promised by the Government has actually been passed on to businesses.

Regional Economic Development Minister Shane Jones has defended the $50m spend.

He said it would not be a good use of taxpayers’ money to allocate millions to projects that had not undergone the necessary viability work.

National’s economic development spokesman Chris Bishop said although this was great news for contractors in Wellington who wrote glossy reports, it was not great for the regions that were crying out for solid economic policy.

Since the PGF was started in 2017, $47.5m has been allocated to fund 114 viability studies.

For example, almost $100,000 was given to Whanganui Port for a feasibility study into a potential geotechnical project and almost $1 million was earmarked for looking into an “Inner-City Development” project in Invercargill.

A spokeswoman for Jones — who is overseas — said although feasibility studies were important, from now on ministers want to see a focus on projects which are investment-ready.

“We’re no longer seeking applications for business cases or feasibility studies unless they comprise a core part of a project that we can be sure will eventuate,” he said.

He added most feasibility studies were tracking to their contracts, but he warned anyone involved in a study that was dragging on should get their act together.

“If you want to be in the line of contenders prior to the next election, then push the speed button. If not, then take your chances that a future government will look kindly upon this kind of fiscal initiative, but the prospects of that happening are totally in the lap of the electoral gods.”

Of the $47.5m that has been allocated, $17.6m has actually been paid out.

When it comes to overall PGF allocation, of the $2.46b the Government has earmarked to date, just $274m has been spent.

Bishop said if Jones paid as much attention to the competent delivery of useful projects as he did to PR and big announcements, the regions would see more progress.

“Jones is very quick to make the big announcements, but as the regions are discovering the cash is very slow to actually flow.”