P3 partnerships not always wise
Thu Aug 07 2014
RE: Deadbeat, U.S.A., Editorial Aug. 5
There is no doubt that this bridge is needed. But just how much is it going to cost taxpayers and who will it enrich? And will we ever know?
The Windsor-Detroit Bridge Authority (“WDBA”) will manage the procurement process through a public-private partnership (“P3”), select the P3 concessionaire, be responsible for project oversight and will set and collect all tolls. Chairman of the WDBA board, Mark McQueen, is also president and CEO of Wellington Financial, a venture capital firm. Director Caroline Mulroney Lapham (Brian’s daughter) also works for Wellington Financial, as VP of corporate development.
Ontario has a long history of failed P3s – 407 ETR, ORNGE, Ontario Power Authority gas plants, the Brampton and Ottawa hospitals. So do other provinces.
Based on a study of 28 Ontario P3 projects, worth more than $7 billion, University of Toronto assistant professor Matti Siemiatycki and researcher Naeem Farooqi found that public-private partnerships cost an average of 16 per cent more than conventional tendered contracts. Government prefer P3s to fund public projects, not to ensure the cost-efficient delivery of a public service, but to get costs off the government books. This keeps taxes low and reduces public debt.
But as Ontarians have experienced, taxpayers are often required to put up additional funds when something goes wrong. Or, as in the case of the Highway 407, the government cannot control the tolls charged for the use of a public highway. P3s reward powerful and well-connected contractors and financial institutions whose goal is devalue public services in order to maximize profits.
Municipalities have recently been told that any federal project worth more than $100 million must now be approved by a Crown corporation called P3 Canada, which will make binding decisions on whether the infrastructure must be a P3. In other words, those seeking federal funds for public projects must use a P3 unless P3 Canada says otherwise. This has serious implications for sensitive projects such as water and sewage plants, transit etc.
There are some public services which may be best undertaken by the private sector. If so, let them assume all the risk and ensure that the public receives value. But most necessary public services can be delivered most effectively and efficiently by the government. Most of us cannot afford to pay for private services that replace those that we lose through the public sector. No one begrudges tax dollars being put to good use providing desired public projects or services.
P3s are a shell game intended to bamboozle the public into privatizing profits while socializing risk. We rob future generations of public services that our taxes have paid for, but which we do not receive, because we cannot hold governments to account. How long are we going to allow ourselves to be duped by the promise of low taxes and lower debt while we are being robbed by P3s?
Pat McGrail, Brampton
The simple solution to the deadbeat Yankees who refuse to pay any part of the new bridge connecting Detroit and Windsor: U.S.-plated vehicles pay triple the toll of Canadian-plated vehicles until the bridge is fully paid off. Our bridge, your tolls. Ba-da-boom.
Edward A. Collis, Burlington