Public interest compromised by government’s pursuit of “P3s”

(Vancouver) As industry proponents and BC government officials prepare for a closed-door conference promoting ‘public-private partnerships’ (P3s), a new study raises major concerns about higher costs and lack of accountability in P3 infrastructure projects.

Value for Money? Cautionary Lessons About P3s from British Columbia was released today by the Canadian Centre for Policy Alternatives. It examines how P3s have been used for public infrastructure projects such as roads, transit and hospitals in BC and internationally. It finds that:

• P3s are being aggressively pursued in BC in spite of a lack of evidence that they are a superior option.
• P3s are less cost-effective, timely and transparent than traditional government procurement.
• Partnerships BC, whose mandate is both to promote P3s and evaluate whether they are appropriate for use on specific projects, cannot adequately protect the public interest.
• Decision-making about infrastructure projects is being guided by “Value For Money” assessments produced by Partnerships BC that are so subjective, so complicated, and so consistently withheld from public scrutiny that they are not of legitimate use.

Stuart Murray, author of the study and the CCPA’s Public Interest Researcher, says “One rationale after another has been put forward by those who favour P3s, but the only rationale that stands up to scrutiny is that they generate profit for industry. That’s not a good enough reason to pay more for something than it’s worth.”

The study looks in detail at three BC case studies: the Abbotsford Hospital, the Canada Line (RAV), and the aborted District of Maple Ridge Core Project. “In all three cases, the Value For Money reports used to justify the P3 option were not produced by an independent third party, nor were they released to the public before the contracts were final,” says Murray. “Instead, the Value For Money reports were produced at the wrong time, by the wrong people, and with limited transparency.”

Murray says that “While P3s may be appropriate under some limited circumstances, the provincial government should abandon its commitment to this model and take a more objective approach.” The study recommends that:

• All major public infrastructure projects should undergo a cost-benefit analysis that assesses the value of undertaking a project in the first place.
• If the government wishes to consider pursuing a P3, the Value For Money process used to assess this option should be carried out by the Auditor General’s office, not Partnerships BC.
• Assessments of P3s, including Value For Money reports, should be made available to the public before projects reach the point of no return.

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To arrange an interview, call Avi Goldberg at 604-801-5121 x229.