Civil servants learned quickly in change to corporate 'suits'

By Campbell McIlroy

Friday 31st March 2000

Greg Ball

Former state-owned enterprise The Property Group has faced the potential loss of half its business, won it back and achieved a turnover of $6 million - all in the space of 12 months.

On March 31 last year staff at Terralink property services successfully completed a management buyout of the SOE to establish a property consultancy specialising in public land issues.

But the future success of the enterprise was at risk before the ink had dried on the deal when its major client, Transit New Zealand, put its property services contract up for tender.

The Property Group managing director Greg Ball said he realised the company could not expect to win the contract just because it was an ex-SOE. It was a brutal welcome to the realities of operating in the private sector.

The potential loss was also reflected in the sale price, with the government valuing the company at $3-4 million. Mr Ball gave no indication of the actual price paid but said it was well below this and had to be with the potential loss of half the business.

The contract was secured and the company set about a major shift in culture from that of civil servants to corporate consultants.

Many in the civil service were great letter writers but "lacked the balls" to knock on doors, Mr Ball said.

There were now over 60 staff and the conversion from land purchase officers to leading experts in their field was complete, he said.

The Property Group specialises in the acquisition and disposal of property for government agencies, local authorities (55 out of 72 of which they count as clients), utility and energy companies, health sector organisations and major corporations.

After public sector reform there were a some SOEs which had little knowledge of what land they actually owned or how to go about acquiring or disposing of it.

In an earlier example before The Property Group was formed, Telecom was part of the Post Office and as the government telecommunications agency it was not an issue to put its repeaters or cables on government-owned land. But once privatised the situation changed, especially with the advent of mobile phones and the scramble to secure cell sites.

In a more recent example, Mr Ball said, The Property Group had worked to establish who owned lighthouses and the land they stand on for the Maritime Safety Authority.

It had also helped Napier Hospital establish a new mini accident and emergency department through a design-build lease arrangement with a private developer, instead of entering into a costly construction programme itself.

Recently the company picked up WestpacTrust as a client, identifying sites for ATMs and negotiating on the bank's behalf.

The Property Group also gained a lot of work through the recent division of ECNZ. It helped electricity companies establish who owned what.

About 50% of agents accredited to purchase land on behalf of the Crown are employees of The Property Group.

It uses a Napier-based legal team which has competitive charge rates over the large firms in the main centres.

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