BURNABY – CUPE BC President Barry O’Neill issued the following statement following Transportation Minister Kevin Falcon’s announcement Wednesday that the new Okanagan Lake (William Bennett) Bridge P3 will cost taxpayers almost 50 per cent more than originally estimated:
“Blind faith and a strong dose of naivety are what B.C. taxpayers need to accept the provincial government’s story justifying the ballooned cost of the new P3 bridge in the Okanagan.
Kevin Falcon attributes the massive cost increase to a dramatic run-up in the price of steel and concrete. Never mind that Statistics Canada reports that steel prices increased only 22 per cent last year and concrete prices went up only 4 per cent – far short of the 50 per cent P3 project cost increase.
It helps to pretend that total project capital cost is made up only of raw material costs and not operating costs, like labour and insurance.
We’re expected not to clue in that private business pays more than public institutions when it borrows money to finance projects – which means that taxpayers will be paying SNC-Lavalin, the successful “partner” in this project, more than we would have if the deal was financed publicly.
Ignorance is apparently bliss for taxpayers given the June 29 Partnerships BC news release, which claims without any substantiation that taxpayers will save money over the decades with this P3 contract. No evidence of this is provided, but just in time for the ink on the contracts to dry completely, we’ll be able to see for ourselves in the value for money report, which will be released “within 60 days of financial close”.
To wake up from this daze, imagine yourself as a car dealer. You quote your customer a price and give them the estimated operating costs, based on the cost of gas, spare parts and warranty coverage at the time of sale. Would you sign a contract of sale that allowed your customer to come back a year later demanding a rebate for the unexpected rise in fuel costs and steel used in spare parts?
This is the kind of “partnership” deal our provincial government has made with SNC-Lavalin in their zeal to provide corporations with guaranteed profits from the public purse. Like a bee to honey, SNC-Lavalin has come back for more. Why not, given their experience with the RAV line. In that case, the “low bid” from SNC-Lavalin was $343 million more than the fixed budget ceiling set by the TransLink Board.
Over 30 years, B.C. taxpayers will pay Montreal based SNC-Lavalin $179 million to build, finance, operate and maintain this bridge. It’s public money, but we have no way of verifying how it is being spent, how much of it is serving the public and how much of it is serving profit. CUPE BC demands accountability and transparency in these P3 deals.
Start with Section 8 of the Budget Transparency and Accountability Act. It requires the government to present a list when it presents the Budget of all projects which are anticipated to cost over $50 million. Carole Taylor should explain why her government failed to include the Okanagan Bridge in its $50 million list in last February’s budget.
We insist that Finance Minister Carole Taylor and Transportation Minister Kevin Falcon release the Okanagan Bridge value for money report immediately.”
CUPE BC is the province’s largest labour union representing more than 110,000 public sector workers in municipal, transportation, education, social services and health sectors.
Contact: Barry O’Neill, CUPE BC President, (604)916-8444 or Diane Kalen, CUPE Communications, (604)291-1940, ext. 240.