Brian Rudman: In at the deep end on city's pools

Auckland City officials had hoped, with the aid of band-aids and temporary supports, to keep the Tepid Baths from collapsing into the Waitemata ooze until 2012, when $12 million had been budgeted for restoration work.

But a recent engineering survey, revealed to councillors in a confidential report, found the old swimming baths were a Princess Ashika waiting to happen. Years of patch-ups were only postponing the inevitable.

Deterioration of the concrete base, nearly 100 years old and made from salt-laden sand from the harbour, was progressing much more rapidly than previously predicted. The same went for the overhead steel trusses, which are badly eroded and need replacing.

Arts and recreation committee chairman Greg Moyle says this meant plans to spend $3 million on a temporary pre-Rugby World Cup tart-up would have been a waste of money, leaving the council no option but to close the place next May.

All of which sounds reasonable. What is less so is the decision to close it for up to four years. Someone remarked to me yesterday that building the Sky City complex, including the tower, took less time.

The council says it will need this time "because of the engineering involved in detailed planning for the development and the heritage constraints that need to be considered through consenting the works".

The council lists the baths as a Category A heritage building. Yet when you think the city council, with the Government and the Auckland Regional Council, happily went ahead with plans to build a passenger terminal and "party central" on Queens Wharf from scratch in half that time, it makes you wonder. If it is a matter of money, surely they could borrow against the petty cash until the 2012 money becomes available?

Rust and concrete cancer are not the only curses that never sleep. Another is the dream of politicians of the right that public-private partnerships can somehow create free money out of the ether. It's the old alchemist dream, so alluring and never quite dies.

A week ago, Mr Moyle's committee dispatched officers "to gauge the private sector's interest" in redeveloping another of the city's decaying pools, Pt Erin pools in Herne Bay, "in partnership with the council".

Built in 1962, the pools are "at the end of its economic life".

They were "previously identified as a high priority for redevelopment", estimated cost at $10 million.

But officers told the politicians the council had allocated only $7 million for pool development city-wide in the 2009-2019 period, of which "between $0 million-$5 million" could go to Pt Erin. Hence the attraction of the PPP option.

Like Treasury officials in similar documents to their Wellington masters, the city officials' report is lukewarm about the merits of PPP schemes. It talks of the need to "measure the economic, social, cultural and environmental well-beings created by the partnership, rather than focusing merely on financial merits".

It also notes that "the key objective of a PPP agreement is to efficiently allocate risk", and unless there is "efficient risk allocation between the parties, the council will end up bearing the cost of expensive private capital plus substantial commercial risks".

Perhaps a more immediate question is the appropriateness of Auckland City debating the merits of contracting a private company to build and operate these pools less than a year before the new Super City organisation takes control.

Already, politicians vying for a place in the new leadership structure have raised the issue of whether council pools will charge users in the new city. At present Auckland City does, Manukau City does not.

With a PPP scheme, the private operator will expect to recoup his construction costs by charging users - either directly, or through council subsidies - for the 30-year (or more) length of the contract.

Those of a suspicious mind could see signing such a deal as deliberately locking the new council into a long-term policy it might not necessarily support.

Still, it's probably too late to do it now. PPP contracts are, by reputation, incredibly complicated, occupying lawyers for months on end as they try to out-smart the rival's parties with tricky clauses, then hunt for hidden fish hooks.