Jun 11, 2010

Quebec Auditor General slams P3s in hospital project


Quebec’s Auditor General has issued yet one more report slamming the use of public private partnerships (P3s).  With P3s, private corporations finance and operate public facilities and services.  The money they invest is more costly than money borrowed publicly.  It is paid back to them, along with profits for the corporation, by governments over multi-decade contracts.

Examining a hospital project, the Quebec AG report finds the P3 more expensive than public procurement.  He finds that Infrastructure Quebec, the agency that plays the role of Partnerships BC in British Columbia, continues to use assumptions the AG had criticized in earlier reports. 

Discussing the report Quebec’s Auditor General says:

This analysis contains two major inaccuracies. First inaccuracy: a major error in the analysis model, which in presenting a $33.8 million variance, results in showing that the PPP delivery method is preferable to the conventional method, whereas in the absence of this error, the conventional method is more economical by at least $10.4 million.

The Auditor General complains that the P3 deal does not promote accountability and that the project:

was done or will be done without having a vision of the projects as a whole in terms of their global costs and the operating budgets that will be necessary for these new institutions.

Infrastructure Quebec uses the same flawed methodology  that Partnerships BC used here to assess P3 hospital projects in Surrey, Victoria, Kelowna, Vernon, Fort St. John and Prince George.

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