Jan 30, 2009

The utter stupidity of P3s in BC


For the “we told you so” file.

The BC government has been insisting on P3s (so-called “public-private partnerships” where the private sector builds and operates infrastructure) all over the province. We at the CCPA have consistently argued that this practice is foolish: more complicated, more expensive, and leaving taxpayers holding the bag if anything bad should happen. As a companion piece to the recent report on P3s by the Ontario Auditor General, the BC office of the Canadian Union of Public Employees released today a report on P3s in BC by forensic accountants Ron Parks and Rosanne Terhart. Drawing on access to information requests, Parks crunches the numbers on four P3 projects: the Abbotsford Regional Hospital and Cancer Centre, the Sea-to-Sky Highway Improvement, the Academic Ambulatory Care Centre (Diamond Centre) and the Canada Line

The report is timely because of the latest news about a P3 plan to twin the Port Mann bridge (that would be the Trans-Canada crossing between Surrey and the Burrard peninsula including Vancouver and other inner suburbs). This is a highly controversial project opposed by environmentalists, urban planners and the cities of Vancouver and Burnaby, among others, because there is no evidence that highway expansion actually reduces traffic congestion for more than a year or two. Former Vancouver city councillor and urban guru, Gordon Price, has asked repeatedly for anyone to give a single example of this type of thing working; he is still waiting.

The twinning project merely plays on frustrations of the single-occupant vehicle owners who hate sitting in traffic to cross the bridge. The timing of the P3 was to get shovels in the ground for election time to win the vote in Surrey, BC’s fastest growing municipality, and to make it impossible to reverse if the provincial Liberals should lose the May election. But the end result will inevitably be even more unsustainable suburban development down the Fraser Valley, probably on current agricultural land, that will within a couple years of its opening lead back to the status quo of bridge congestion, plus even more congestion closer to the city of Vancouver where it is not possible to widen the roads.

Putting environmental reasons aside for a moment, the economic crisis in the financial markets has now led the government to step in as one of the lenders for the project, rather than bailing on the P3 and building the bridge itself. Savour that for a moment: the public sector contracted this beast out because of the alleged superiority of private financing, and when that private financing proved unavailable, the public sector is bailing out the profits of the contractor. Those profits will come from tolls on the bridge, which they say will be $3 a pop but will inevitably be higher due to higher costs of construction. The province justifies tolling a piece of the Trans-Canada Highway because there is another crossing of the Fraser downriver over the aged Patullo Bridge. Oh, did I mention the Patullo Bridge was recently closed for two weeks for repairs when it caught fire.

Sigh. The Sun’s coverage is here.

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