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Competition for NZ Govt master contract to begin

Competition for NZ Govt master contract to begin

(24 June 2013 – New Zealand) The New Zealand Government has decided to put its lucrative banking contract with Westpac up for tender, with a new contract likely to be awarded within a year.

Australian-owned Westpac has had the master contract for over 20 years, handling the Government’s core transactions.

The latest discussion document published by Treasury and the Ministry of Business, Innovation and Employment (MBIE) stated the arrangement was no longer enough to meet the Government's current and future banking needs.

The document proposed creating an 'All-of-Government' solution, which would use the entire state sector's purchasing power to get better value for money.

Public service departments, state service agencies, about 2500 schools and the wider public sector could be involved.

In a written statement, Westpac said it 'welcomes the opportunity to participate in any process that allows us to further demonstrate our capability and the value we deliver to Government'.

Bank responses will be evaluated towards the end of the year, and the contract awarded in May or June 2014.

The contract is understood to be lucrative, with Westpac processing more than 91 million transactions for the Government in the year to 30 June.

Kiwibank ruled itself out of the running for the banking contract in a statement on Friday, following suggestions from the Green Party and others that the state-owned bank would be a logical successor.

'It's a huge contract, and we just don't have that infrastructure yet,' said Communications Manager Bruce Thompson.

'There are ambitions in that direction, but that's part of the long haul.'

The only other contenders with a strong enough credit rating and back-end processing power are likely to be the big Australian banks.

ANZ, the largest of the local banks, has thrown its hat in the ring, ASB Bank Executive General Manager Commercial and Rural Steve Jurkovich said his bank 'would certainly be interested in participating in any tender process that may occur as an outcome of these discussions'.

ASB is owned by Australia's Commonwealth Bank, while Bank of New Zealand, the last of the 'Big Four', is yet to respond.

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