Forensic auditors say P3s expensive, biased and secret
So who are you going to believe about public private partnerships (P3s)?
One side of the debate says they’re swell. They save money for taxpayers, they come in on budget and they transfer risk from governments to companies. But other people say details are kept secret from the public and that in fact they cost taxpayers lot more.
Today the Canadian Union of Public Employees released a report that looks at these questions and offers some credible conclusions. (Full disclosure here – I work for CUPE in my day job) .
CUPE engaged two prominent forensic accountants – Ron Parks and Rosanne Terhart of Blair Mackay Mynett Valuations Inc. – to examine financial information on P3s. Both have more than 20 years experience in accounting, auditing and forensic accounting investigations. Parks is perhaps the best known accountant in the province.
The information they worked with came from two years of work through Freedom of Information legislation. Even with that, it was only possible to get information on four projects: the Canada Line, the Sea-to-Sky Highway, the Diamond Centre at Vancouver General Hospital and the Abbotsford Hospital.
Parks and Terhart came to some tough conclusions:
- “The cost of P3’s exceeds traditional procurement methodology for the projects referred to”
- “The methodology used by Partnerships BC to compare the P3 projects to the public sector comparator is biased in favour of the P3 projects.”
- Critical information was denied under FOI requests. “In our view this suggests a general lack of transparency and public accountability.”
These findings have huge implications, especially because P3s tie the public to 35 year contracts. And they are especially timely in light of recent news reports that P3 financiers for projects like the Port Mann Bridge are in big trouble.