B.C.'S Auditor General is raising questions about why the province is paying the company behind the Sea-to-Sky Highway Improvement Project for meeting incentives that the Ministry of Transportation and Highways has not been actively monitoring.
B.C.'s Auditor General John Doyle raised the issue in a report released last month that examined whether the highway project - built through a public-private partnership - had achieved its goals and provided good value for money.
"P3 contracts are often complex and long-term: They require effective governance and contract management to ensure government achieves value for money," wrote Doyle in the report.
The report concluded that the project was well managed through the design and construction phases, but that since the highway was finished at the end of 2009 the province has not been measuring how well the highway has succeeded in improving safety or reliability, according to original benchmarks set out in the contract.
That contract includes an annual "safety performance payment" to the private-sector partner, to be paid after comparing Sea-to-Sky accident statistics per kilometre with the average of four other comparable B.C. highways, Doyle wrote in the report.
But he said the ministry hasn't measured that - despite the fact "the data does exist to allow this kind of measurement."
The original contract contained annual "performance incentive payments" of $1 million a year, adding up to a total of $26 million over the life of the contract.
In its response to the report, the Ministry of Transportation and Highways wrote that it is confident the project has improved both safety and reliability.
"The audit report leaves the impression that it is unclear whether the Sea to Sky Highway is safer now than before the improvement project," the ministry stated. "Ministry data clearly shows that there have been significant reductions in accidents on the Sea to Sky Highway since the main improvements were completed."
According to police-reported figures, the total number of serious accidents on the highway decreased from 219 in 2004 to 124 in 2011 - a more-than 40 per cent reduction.
The number of accident fatalities is also down, from six in 2005 to two in 2011, while the number of injuries reported has dropped from 97 in 2006 to 57 in 2011.
Assistant Auditor General Bill Gilhooly said his office doesn't dispute that the safety of the highway has likely improved. But he said the ministry has not been measuring that in the way specified in the contract.
The contract also calls for the province to pay the privatesector partner a bonus for meeting certain standards of "highway reliability" as measured by travel time, Doyle wrote.
Doyle said during construction, electronic sensing equipment was installed that was supposed to measure vehicle travel time between different points on the highway and to document travel time delays. But the private-sector partner operating the highway has never been able to get the equipment to work, Doyle wrote. Instead, a "manual work-around solution is being used based on observation and self-reporting.
"As a result, we concluded that the province is not effectively measuring and reporting on highway reliability."
The Ministry stated it is still working on fixing technical problems with the equipment.
Doyle noted the project was also supposed to promote economic development and community growth in the area, but there is no mechanism to measure that.
In its response, the ministry noted it "has heard from communities in the corridor that they believe there have been economic development benefits and community growth as a result" of the project.
The ministry added it will report on that "after a suitable length of time that takes into account short-term economic fluctuations."
The 95-kilometre project between West Vancouver and Whistler was originally slated to cost $600 million to build, but ended up costing $795 million. In return for paying more in capital construction costs, the province and privatepartner agreed to reduce the province's annual operating and maintenance payments over the 25year life of the contract.
