by Rebecca Aldous, Victoria News March 28, 2008

But MLA Ida Chong says public-private deals offer benefits.

Victoria is facing a dirty fight if it wants to keep its new sewage system publicly owned, says a key organizer in Halifax’s battle for public plants.

Supporters of a public service in the Atlantic city only won through default and Victoria could learn from the city’s sludgy process, said Cliff White, the recently retired Atlantic regional organizer for the Council of Canadians.

“The private option came up almost immediately and was pushed,” said the long-time social activist who was speaking in Victoria at a World Water Day Forum.

After Halifax flip-flopped on procedures, it shook hands with Halifax Regional Environment Partnership, a consortium led by Franco-Belgian giant Suez and its Canadian subsidiary, United Water, to build a private-public system.

The deal fell apart when the city and consortium couldn’t agree on who would be responsible if the treated wastewater did not meet federal effluent standards. By this time, White said, the city had wasted millions on negotiations.

“As it turns out there were more big savings when (the city chose) to go public,” White said.

The original public-private partnership (P3) proposal carried a bill of $263 million. The budget for the public system is $233 million, and all indications point to the city coming under that target. “They saved about $20 million just by debundling the project,” White said. Construction was broken down to smaller local contracts, he said, which in turn inject money back into the community. Halifax will also yield 15 to 25 per cent in savings during the first 20 or so years, which would have been shoveled out to a private organization for operating costs, White said.

In B.C. any government project equaling more than $20 million must go through Partnerships B.C., a company responsible for bringing together ministries, agencies and the private sector to examine P3 options. For that reason in itself, Victoria-Hillside MLA Rob Fleming said the city is facing an uphill battle if it wants to keep the sewage system public. Partnership B.C. makes commissions by recommending and securing privatized deals, he noted.

Flemming, along with New Democratic party mate MLA Maurine Karagianis, is calling for the Capital Regional District (CRD) to conduct a transparent cost-benefit analysis, which would include the public option.

“One of the hall-markers of privatization is that they try and do everything in back rooms and force on the elected decision makers inevitability,” Flemming said.
After citing failed P3s in Europe, Fleming said he would like Victoria to end up with an efficient public service utilizing resource recovery.
Karagianis agrees. Victoria could find itself locked into 30 years of old technology if it signed up for a private partnership, she said.

“You don’t get any kind of access to new options because you have to live out the lives of these contracts,” Karagianis said.

In the long run, she added, resources like water will be very valuable. Karagianis said politicians need to ensure Greater Victoria’s water rights are protected.

Oak Bay-Gordon Head MLA Ida Chong said there are many benefits to P3s, including cost savings and transferring risk, especially in the case of insurance risk and schedule overruns. P3s promote innovative technology because the private sector seeks faster construction times and different ways to come under budget, she added. As minister of community services, she reviews all options presented by Partnership B.C.

“Our job in the ministry, and myself in particular, will be to ensure there is a plan that has the very best lowest cost solution and ensure Partnership B.C. advise us on the merit of doing a public-private partnership, if it in fact comes back that way,” Chong said.

The CRD is completing environmental studies for the province including examining P3s during the business case, CRD chair Denise Blackwell said.

raldous,,,vicnews.com
http://www.bclocalnews.com/


A reader responds:

Re: “Activist Warns Against P3s” Mar 28/08

P3 “BENEFITS” A MYTH

The Saanich News has done the community a great service by shedding more light on the public-private partnership (P3) debate.

It should be noted that the Halifax P3 deal did not fall apart just because the “city and consortium couldn’t agree on who would be responsible” if treated effluent didn’t meet federal standards. In fact, after landing the contract the private partner tried to renegotiate so that taxpayers would be liable for federal penalties should effluent standards not be met. Halifax officials refused to give in and pulled out of the deal, even though they’d already invested many years and millions of dollars in the P3 process. Fortunately, the deal was "not enforceable" because Ottawa hadn’t given environmental approval in time to officially validate it, so the Suez consortium simply walked away, stating that meeting the specifications (i.e. assuming the risk) would have cost them an extra $20 million. (MLA Chong neglects to point out that “transferring risk” to the private partner doesn’t come cheap.)

Renegotiation of contracts at the 11th hour is a well-known P3 ploy. Halifax officials were fortunate in that they didn’t have to answer to the province for holding their ground. Unfortunately, here in the CRD we do not have the luxury of autonomy. By forcing the CRD to justify its rejection of the P3 option, our provincial government is steering us down a path that could give private companies the upper hand during negotiations, a situation that is clearly not in the best interest of taxpayers.

P3s are complex, multi-decade contracts for which there is no consistent evidence of cost savings or better service when compared to traditional public projects. (see “Public-Private Partnerships and Municipalities: Beyond Principles, a Brief Overview of Practices,” an independent study for the Federation of Canadian Municipalities, www.fcm.ca).

F. Keddie