Privately-built state school near

The Government will announce the construction of a privately-built state school in this year's Budget, documents show.

But it will not identify which schools are being considered for a Public-Private Partnership (PPP).

Under the plan, a private company will build and own the school but the Crown will own the land and its board of trustees will retain governance and operational responsibility.

However, according to official papers, the school's owners could use the school outside normal school hours and school boards would have to negotiate an "occupancy agreement" with the private owner.

Teachers' unions say they have not been told about the project and want to be consulted before it is formally announced.

Education Minister Anne Tolley signalled last year that the Education Ministry was exploring using private sector capital to build new schools. Just released Official Information Act papers show the ministry and Treasury have plans well advanced for the construction of a trial PPP school. Others are planned if it is a success.

The ministry spends $500 million a year on school buildings, and must build three new secondary schools over the next four years to cater for roll growth. The average secondary school costs around $70m.

Cabinet appears to have earmarked one of the three schools for a PPP, but sections of the report have been blanked out. Officials have asked several major contractors to tender for the first project.

They have advised the Government that using PPPs for school buildings is still "high risk" because of the potential for litigation or opposition from the education sector.

The reports say while PPPs have been used widely in some countries, New Zealand has not suffered from the same systematic level of under-investment in school property. Nor did it have the same demand for new expenditure as Australia.

The ministry has advised the Government that the plan may be unpopular with teachers' unions and school boards.

Teachers' unions said they had deep concerns about the proposal.

"Government has a responsibility to provide public education ... and any erosion of that is a very serious thing indeed," Post Primary Teachers Association president Kate Gainsford said.

Frances Nelson, president of primary teachers' union, the New Zealand Educational Institute, said similar schemes had failed overseas.

She was concerned that a PPP might limit schools' say in how their property was used and community access to school facilities.

Principals Federation president Ernie Buutveld was worried companies had already been asked to tender for the project when teachers, schools and communities had not been consulted. "It seems a bit strange ... when the various merits or not haven't had any scrutiny by the people who might be affected."

All three presidents hoped the Government would fully consult with schools before the May Budget.

A spokesman for Mrs Tolley said the Government was still at "stage one business case" stage, but was using specific projects to see whether PPPs offered value for money.