Toronto Mayor David Miller says the built-in “ideology” of the federal Conservatives’ infrastructure plan is delaying the extension of a key subway line. He calls the demand for a P3 review of the long-awaited northward expansion of the Spadina line ”crazy”.
Miller told the media the federal government has yet to deliver the $697 million Stephen Harper has pledged, because the government is forcing the Toronto Transit Commission to review the expansion project as a public private partnership. The Conservatives’ Building Canada infrastructure deal includes a mandatory P3 review for any project getting more than $50 million in federal funds.
- Update: the federal Conservatives finally deliver the funding, nearly a year later
“It’s an ideological view that we have to reinvent the way we do these things,” says Miller in the Globe and Mail. “And it causes enormous delays when there’s an existing project that we’re actually moving on that the federal government in effect is saying stop until you review it through our ideology….and they’re going to come to the conclusion we’re doing it the right way anyway.”
Any assessment should start – and end – with a thorough look at the recent failure of a P3 for upgrading large sections of London, England’s subway system.
Metronet, the consortium that won the contract for the bulk of the tube work, folded in July, after failing to get additional public money for cost overruns approaching £2 billion (over Cdn$4 billion).
The deal’s been under scrutiny since 2004, when Britain’s National Audit Office questioned whether the massive privatization deal was good value for money.
While proponents of privatization argue P3s transfer risk away from government, it’s still the public sector that is ultimately on the hook.
London’s tube system has to continue operating, so the risk - including the bill for Metronet’s overspending - gets handed to the municipal government. It’s costing £13 million a week just to administer the failed contractor.
London Mayor Ken Livingston had pushed to fund the work through municipal bonds and do the upgrades in-house, but lost a court challenge to cancel the privatization.
As British P3 expert Allyson Pollock told the media, “the whole rationale for using PPPs is that the government has transferred the risk: well, this just blows a hole right through that argument….What we are seeing is that the risks just revert back to the public sector, at a cost much higher than if they had just contracted it on the usual government basis.”
British MPs are now calling for a public inquiry into charges of corruption that have emerged from the Metronet affair.