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The renovation and expansion of Quebec City’s Hôtel-Dieu hospital should be a public project, according to a new study.

Researcher Pierre Hamel’s study identifies many problems with the Liberal government’s P3 plans. A key finding is that privatization won’t work for a university hospital, which must be at the forefront of technology.

Prof. Hamel is a researcher at the Montreal-based Institut national de la recherche scientifique. CUPE commissioned the study as part of its campaign to keep the Centre hospitalier universitaire de Québec (CHUQ)’s Hôtel-Dieu hospital public. The hospital is the oldest in North America.

The 300-page study identifies “several serious structural problems” with P3s:

  • P3s limit competition and are biased towards the world’s biggest firms, particularly with large contracts like the CHUQ project
  • P3s lack transparency
  • P3s don’t allow flexibility and adaptability – something that’s essential for hospital services that evolve rapidly and in unpredictable ways
  • P3s cost more
  • P3s don’t serve the public interest

Professor Hamel conducted extensive research on P3 hospitals in the United Kingdom, France and English Canada, among others.

The criteria used to assess whether university hospital projects should be public or private are flawed, according to Hamel.

He points to a recent Auditor General of Québec report showing the provincial P3 agency systematically presented P3s in a more favourable light than the public approach.

The auditor found the agency’s value for money analysis was biased, and its discount rates too high. Unrealistic public sector comparators also favoured privatization. Hamel notes that this biased approach is also used in the United Kingdom.

The study concludes that P3s limit competition and do not increase efficiency. P3 contracts aren’t transparent, and the public rarely has access to the full contract. Hamel reports that Deloitte & Touche UK raised the issue of transparency in a study of UK P3s (known as Private Finance Initiatives, or PFIs). The British study advised against using P3s for complex projects.

Hamel concludes that renovating the Hôtel-Dieu hospital as a PPP is a risky gamble that won’t serve the public interest.

CUPE 1108 president Katty Paradis says workers at the CHUQ feel the project has been delayed long enough and that the government is still dragging its feet. “They need to stop playing yo-yo. People want this to happen, and they want to hear that it’s being done as a public project.”

In June 2009 CUPE 1108 estimated the cost of the project would reach $1 billion, mainly because delays caused by the P3 process. This figure has never been challenged.

In January 2010, the first phase of the Hôtel-Dieu renovation and expansion project was announced with much fanfare by the Minister of Health. This first phase will stay public. The minister has remained vague on whether the remaining two phases will be public or private.

See also:

News coverage of the report [French only]