“Recently, several so-called public private partnerships (P3s) have unraveled, and are now going ahead as public projects. From the Port Mann Bridge in British Columbia to the Turcot Exchange in Quebec, governments can’t find the claimed savings, and private corporations can’t raise the cash,” says Moist.
The global economic and financial crisis has hit the private sector hard, making private capital far more expensive and elusive than public borrowing. But even before the economic collapse, P3s came with delays and inflated costs. The crisis exposes structural problems with privatization that cannot be repaired, even as the hostile credit climate begins to warm.
“The Ontario auditor general’s report on the Brampton P3 hospital highlights a fundamental problem when public infrastructure and services are privatized. The project wasted hundreds of millions of dollars- money that could have been invested in public health care,” says Moist. “Just privatizing the borrowing added $200 million to the price tag - and that was before the economic crisis.”
Privatization brings with it built-in delays, as complex deals must be negotiated between corporate players and projects must go through bureaucratic evaluation processes.
“Plowing money into P3s won’t deliver the economic kick-start that communities are still waiting for. Local economies also suffer as contracts often go to large multinationals. That means fewer local jobs and less local purchasing. It’s time to deliver infrastructure and services the public way – quickly and cost-effectively,” says Moist.
Privatization schemes are also shrouded in secrecy - a major concern for taxpayers wanting to scrutinize the $1.2 billion in planned spending.
“If P3s deliver value for the public, why do they need this additional billion dollar subsidy from the federal government over and above what provincial and municipal governments already provide?” asks Moist.
CUPE believes PPP Canada Inc. should be transformed into a Public Assets office that will work directly with other orders of government to reverse privatization, and invest in public infrastructure and community economic development.