Sep 15, 2012

Construction industry accuses Partnerships BC of conflict of interest


I think that Philip Hochstein, president of the Independent Contractors and Business Association, is probably more hostile to the interests of working people than just about anybody else in British Columbia. So when I find myself agreeing with him on something, my fingers twitch at the keyboard.

But that is just what happened with the recent pronouncements by the construction industry about British Columbia’s privatization agency, Partnerships BC.

Hochstein and the Vancouver Island Construction Association’s (VICA) CEO Greg Baynton are quoted in the Journal of Commerce as saying that Partnerships BC has a conflict of interest. They think the way PBC puts projects together for the government prevents local small and medium sized construction firms from getting any of the work.

Hochstein accuses PBC of “mandate creep” saying:

“Partnerships BC was created to assess projects’ suitability for public-private partnerships (P3s),” he said.

“But, that’s grown to managing construction projects outside the P3 realm and collecting fees to do so. It raises questions about the objectivity of their analysis of projects because they have an incentive to recommend that they themselves manage the projects.”

Baynton weighs in with:

“Partnerships BC definitely has a role to play in public procurement,” he said.

“But, it’s been rolling out project delivery services in direct competition with the private sector. There are many private companies that can provide that service.”

Baynton said his association met with the Ministry of Finance in April and June 2012 and spoke to the deputy minister and representatives of the Treasury Board about the matter.

“They acknowledged the possibility of a conflict of interest on the part of Partnerships BC,” Baynton said.

BC’s construction industry is not the first group to accuse organizations like Partnerships BC of conflict of interest.

A report published by the World Bank in 2006 says:

Risks of a conflict of interest arise with crosssectoral PPP units that both provide input into the approval process for PPPs and play a role in identifying and preparing projects. Conflicts also can arise if a PPP unit promotes or assists in developing projects and then is asked to carry out ex post evaluations.

Partnerships BC does all four of those things. That sounds like conflict of interest to me.