Unfortunately for taxpayers, many decision-makers and politicians do not understand value for money.

Not a clue.

And it costs taxpayers billions.

Let me tell you something.

A few weeks ago, I went to Auckland Zoo.

As we do every time, we stopped at the shop on the way out.

This time, my son became obsessed with a crappy little meerkat figurine.

About 5cm tall.

Pure plastic.

I did not even look at the price.

I was delighted.

How cheap!

I walked to the counter and paid.

I was slightly surprised when they charged me 10 bucks.

Then we carried on walking towards the car.

“What did you buy?” my wife asked, catching up.

“This.”

“That??? Instead of a nice fluffy toy, you bought that?”

“He liked it.”

“And how much did it cost?”

“Ten bucks.”

“What??????”

My wife’s face was a picture.

“For 30 bucks, you can get a big, fluffy meerkat. At least 30cm tall! That thing is tiny… and PLASTIC!”

And she had a very good point.

Indeed, there were other soft toys for $50 that were around 60cm tall.

There were even giant ones… around150cm tall and weighing five kilos or more… for $100.

Her criticism was simple:

“That is not value for money.”

And this is where I completely disagree.

If you define value for money as centimetres per dollar, she is probably right.

You pay more.

You get more.

The ration improves as you spend more…

But I’ve seen too many PPP and major infrastructure disasters… and I think in terms of service.

My son does not care whether one soft toy is bigger than another.

What he wants is the ritual of buying something at the end of a day at the zoo, playing with a new toy for a few weeks and then forgetting about it.

My meerkat performed that function perfectly.

He loved it.

We completed the ritual.

And, to this day, he is still playing with it. It is almost his favourite toy.

Unlike some of those $50 soft toys, by the way… but as my wife may read this… I won’t continue over there…

Anyway… that meerkat performs its intended function at the lowest cost.

That is value for money.

People get this terribly wrong.

They need a road that will carry a few thousand vehicles from Point A to Point B at X kilometres per hour.

But no.

Someone wants it to be “world-class.”

Ten-metre medians.

Three-and-a-half-metre shoulders, including across every structure.

A pavement that will remain indestructible for the next five generations.

And so on.

That is value.

Or perhaps an excess of value.

Fine.

But what about the cost?

Common sense says that if two designs both meet the minimum requirements (the ritual, the toy and 24 hours of peace for the father), the cheaper offer provides better value for money.

It is your job, as an infrastructure leader, to define those minimum requirements.

And then stick to them when the proposals and siren songs start pouring in, inviting you to spend more than you actually need.

It is that simple.

Everything else is ego and a desire to throw away the taxpayer’s precious money.

If you are still not clear about it, the best thing you can do is call me.

Use the link below.

Use this information at your own risk.

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