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Protecting public coffers from pitfalls – we can do it ourselves, thanks

The following letter to the editor by CUPE NL President Wayne Lucas was published in The Telegram on Saturday, November 26, 2016, in response to the November 22 article (and remarks by former Bridgepoint CEO Marian Walsh) entitled “Liberal government expected to take P3 approach: construction association”. 

We all need to remember that the developers vying for the Corner Brook hospital project, and other privately owned companies, are not going to do anything unless it earns them a sizable profit. That is a conflict of interest with what is best for the public and taxpayers.

Do we, as taxpayers, want to foot the bill for more P3 projects that will inevitably run late and over budget, in both construction and maintenance costs?

Economist Toby Sanger’s report Ontario audit throws cold water on federal-provincial love affair with P3s, explains that Infrastructure Ontario oversees all the province’s P3s, which would include Bridgepoint projects. The report was not flattering and stated that, “Every single one of Infrastructure Ontario’s 75 P3s was justified on the basis that they transferred large amounts of risk to the private sector, but there was absolutely no evidence or empirical data provided to support these claims in the crucial value-for-money assessments.”

There were many more negative aspects of P3s listed in Ontario’s Auditor General report, but what point really struck me was the statement that the failed P3s added the equivalent of $1,600 in debt, per Ontario household.

Can you imagine Newfoundland Labrador families taking on that kind of debt?

Now let’s talk about Partnerships BC. In a report by the BC Finance Ministry last year, that examined Partnerships BC and its public private partnerships activities, serious issues were raised about conflicts of interest, and questionable policies and practices in the program.

The report also examines a P3 practice referred to as “bundling”. This practice often excludes smaller companies from bidding on and participating in megaprojects, such as the construction of a hospital. Would the NL Government be acting in the best interest of small companies if it supported P3 partnerships that allow this practice to take place?

When confronted with past failures, P3 proponents always claim they’ve changed their ways and they have new and improved P3s, but we know the formula remains the same.

I repeat: the privates sector profits off the public purse, while the public and taxpayers always end up footing much higher bills – and have to deal with poor quality P3s and public service cuts because of higher costs.

As for Ms. Walsh’s assumption that P3s are better at long-term budgeting, over 30 years of operational spending, I would argue that the public sector has the capacity to plan and budget for the proper hard facility maintenance itself, at a lower cost – and with more control and flexibility than the private sector.

All of our elected officials should raise questions if staff, consultants, or P3 agencies propose P3s to deliver infrastructure projects in our province. I strongly recommend they begin with the list of “Ten Essential Questions To Ask” prepared by John Loxley.

Hidden practices, refinancing, costly leasebacks and sales, higher interest rates and borrowing costs, subcontracting and lack of control of operation and maintenance… there’s too much risk in a public-private partnership. The true costs and consequences of these deals are often beyond the reach of the public and shrouded in secrecy.

These very real risks far outweigh the perceived benefits of P3s. Lets protect our families and our public coffers from the pitfalls – we can do it ourselves, thanks.

Wayne Lucas
CUPE NL President

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