Commerce Commission to investigate Drainage monopoly while ...

The Commerce Commission has agreed to investigate monopoly practices inside the drainage industry while Kāinga Ora continues to fuel it.

The insanely under regulated NZ industry allows for monopolies and duopolies and oligopolies to form and there is a huge one inside the drainage industry, but because it’s all under ground, the full costs of this uncompetitive market is hidden.

Two large infrastructure companies – who were both quite capable of doing large subdivision builds themselves – formed a Joint Venture  to become the ONLY company Kāinga Ora would contract to for work in the entire Tāmaki region. So neither company had to worry about their margins or competing with each other.. they just take turns and divide the work up between them.

They then put out a RFP for a company to supply drainage products to them. They sent the RFP to ONE company only to pitch for the work – and then made it a multi year exclusive contract!

There is no free/fair market at play – it is a completely closed loop where Kāinga Ora is paying with Tax payers money into a completely rigged system where price wasn’t the issue – just give the Govt the ability to say we have built XXX houses this year and it doesn’t matter if they cost twice as much as last year! Kāinga Ora has no idea if the price they are paying is to high or not as there is no clear market forces at play.

The sooner the Commerce Commission investigates the wider issues in the drainage industry, the sooner we can start forcing prices down for housing.

I’m not looking for socialism from Labour anymore, just basic regulated capitalism!

Increasingly having independent opinion in a mainstream media environment which mostly echo one another has become more important than ever, so if you value having an independent voice – please donate here.

If you can’t contribute but want to help, please always feel free to share our blogs on social media