Warning message

Please note that this page is from our archives. There may be more up-to-date content about this topic on our website. Use our search engine to find out.

Its no secret New Brunswicks privatized portion of the Trans-Canada highway is costing taxpayers dearly. But the bill has grown even bigger.

In March 2002 the provincial government agreed to pay a further $24.5 million to the multinational consortium that built, owns and operates the road. The payment was to settle the consortiums claim for extra construction costs reported at $27 million when news of the case first broke in January, but which quickly rose by $80 million to $107 million.

The settlement heads off a hearing before a closed-door panel, which was scheduled for the spring. New Brunswick transportation minister Percy Mockler told the media the costly legal process and the months or years it would have taken to resolve the case were reasons to settle.

The highway opened in October 2001. The new charges are the latest chapter in a story where there seem to be no roadblocks to corporate profits.

In a calculated political move two years ago, the newly-elected Tories removed the most visible lightning rod of public outrage: the tolls being charged on the new four-lane highway. That move cost the public $34 million. And taxpayers are still paying through the nose. Hidden costs of the sweetheart deal with multinational consortium Maritime Road Development Corporation approach $2 billion for a highway that cost $580 million to build. Contracted out maintenance is costing millions more per year than public upkeep. Other public subsidies include the province waiving provincial sales taxes and paying the corporations GST.

The privatized highway has drawn criticism from the provincial auditor, who found that avoiding an increase in the provinces debt was the main motivation behind selling off the stretch of highway. That one objective drove the whole project, he wrote, adding he felt there were other options. The tunnel vision of that decision has locked New Brunswick taxpayers into a 20-year deal that is costing them dearly. And, as recent events show, the final tab has yet to be tallied.

Finally, while Vivendi has its hands on the provinces taps, the multinationals archrival is king of the road for now. The consortium behind the highway project includes the GTM group, a subsidiary of French water giant Suez that owns 25 per cent of the consortium. Vivendi recently bought one of the two Spanish corporations in the consortium, giving it a 12.5 per cent stake in the road.