(Truro) – With the collapse of a major P3 project in British Columbia, CUPE Nova Scotia says the MacDonald government needs to now scrap its own plans.
CUPE Nova Scotia President Danny Cavanagh says, “The B.C. government has announced it will have to borrow money to pay for a $2.5 billion bridge expansion after the project’s P3 financing collapsed last week.
“The privatized financing for the Port Mann Bridge fell apart just weeks after the provincial government bailed the project out, guaranteeing over a $1 billion of the cash the private sector was trying to raise,” says Cavanagh.
The global credit crunch has hit the project’s private sector financier, Australian investment bank Macquarie Group, hard. The bank has been struggling with major financial problems in recent weeks.
Says Cavanagh, “Even B.C.’s minister of transportation and infrastructure, Kevin Falcon, admits ‘a traditionally financed arrangement is the better way to proceed at the current time.’ The private sector will be involved in designing and building the bridge, which will be publicly owned and operated.
Cavanagh says, “This latest development is also a blow to Partnerships BC, the provincial agency hired by the province of Nova Scotia to evaluate three projects here. The head of Partnerships BC has admitted that public borrowing to pay for the bridge will cost $200 million less than the P3 plan. The MacDonald government should just cut its ties with Partnerships BC and take the loss now to protect taxpayers from future financial risk.”
In Quebec, meanwhile, the province’s health minister is worried P3 financing for two Montreal mega-hospitals is on the rocks. One consortium bidding on the projects, Partenariat CUSM, lost British financier John Laing Investments last November. The other group of corporations bidding, Accès Santé CHUM, includes the troubled Australian infrastructure corporation Babcock & Brown.
Says Cavanagh, “This is clear cut evidence that public financing, operation and delivery works best for services and infrastructure.”
Danny Cavanagh John McCracken
President, CUPE Nova Scotia CUPE Communications Rep.