On May 28, the National Post published a piece by Dan Ovsey of the need to vigilance when it comes to P3. This is my response.
Re: The devil is in the details; P3s’ success lies in public sector’s vigilance to hold private sector accountable
Dan Ovesy correctly points out that the public needs to be vigilantwhen it comes to public private partnerships. However the costs to municipalities who move forward with P3s far outweigh the benefits. Even the two examples cited as successes in his piece have faced criticism.
The Confederation Bridge project was criticized by the Auditor General of Canada for costing 45 million more than if it had been built publicly. And the public sector comparator used to justify the P3 inflated the estimated costs of public subsidies for the ferry to make the P3 privatization look more favourable. Bridge tolls that were promised to be at the same level as the cost of the ferry have now risen making the bridge a more expensive route.
The Canada line project is another example of a P3 done poorly. Taxpayers are on the hook to the private funding partner for a base amount of 100,000 rides per day though there were only 40,000 riders on the existing bus routes. Also, the $700 million put up by the private partner also comes with a much higher cost than if the government had borrowed the money itself. The overall cost of the project was very high at approximately 1.7 billion for just 20 km of track.
Growing skepticism about turning to public-private partnerships for public infrastructure is a concern shared by many municipal leaders and the people in their communities. More and more municipalities are saying no to these risky deals as the dangers of P3s are brought to light.
Let’s keep the financing and operating of these services where they belong – in the public sector with public oversight and accountability.
Canadian Union of Public Employees