Dear Editor:
Mayor Derek Corrigan's claims regarding P3s (private public partnerships) in his May 15 letter, Waste Waters Muddied with Misinformation, are largely erroneous.
Firstly, a P3 is not "privatization." In a privatization, the government sells an asset to the private sector (or investors), transferring ownership. Thereafter, there is generally no long contractual relationship between the government and the buyer. In contrast, with P3s the government body has very significant control over the private sector party's project performance, through a legal contract with consequences for non-performance, ranging from financial penalties to contract termination. Also, the government may choose to own the asset.
Secondly, Mayor Corrigan asserts that "Citizens face higher interest costs and loss of control of a public asset." The first point can be true, but let us remember the following conventional (non-P3) projects: B.C.'s Fast Ferries (costed "right down to the toilet paper," Premier Glen Clark) - overrun 100 per cent, no business case, mothballed, sold at four per cent of cost; Montreal Olympics ("The Olympics can no more have a deficit than a man can have a baby": Mayor Jean Drapeau) - paid off by a 30 year surcharge to taxpayers; B.C.'s Expo '86 overrun $700 million; Vancouver Convention Centre overrun $400 million; Langley Stadium (overrun 100 per cent); the fed's Maple Reactors (600 per cent overrun, 14 years late, abandoned after $680 million). How long did taxpayers rejoice at the slightly lower cost of debt in these conventional projects?
Thirdly, Mayor Corrigan asserts that there is "loss of control of a public asset" with a P3. He might read the May 1999 B.C. NDP government PPP handbook, written on NDP Minister Jenny Kwan's watch, which states "it can be argued that local government has more control, in that it has well-defined contractual remedies in a PPP that it may not have with its own management and staff."
Lastly, he claims that "if the private company fails, we have to take over and complete the project." Failures of the P3 consortia do happen, but they also happen in conventional procurement, including a large part of Metro Vancouver's Seymour water treatment plant project.
Not all municipalities agree with Mayor Corrigan.
For example, in the politically sensitive sector of drinking water, the following municipalities elected P3s: White Rock (since 1913), Sooke, Port Hardy, French Creek, Canmore, Okotoks, Strathmore, Chestermere, Taber, Wood Buffalo, and (after its public sector drinking water disaster with seven dead) Walkerton, Ont.
This list is just one service sector, one Canadian water services company, and only B.C. and Alberta.
The major advantage of a P3 is being on schedule and budget far more often than conventional projects, and that in a properly structured P3, the private sector holds the bag unless the cost, schedule, or performance issue was the fault of government.
In conventional procurement, when things go wrong, the taxpayer is usually left holding the bag.
