FOR IMMEDIATE RELEASE
February 8, 2010

VICTORIA, BC - Privately run sewage smells fishy, taxpayer says

Determined to stop the BC Government’s forced privatization of the region’s new sewage treatment system, local resident Jenny Farkas has built a website called “smellsfishy.ca.” The new website invites ordinary citizens to learn about how public-private partnerships really work - or don’t.

“Privatizing public facilities is like a setting up a giant ‘buy now, pay later’ scheme,” says Farkas. “It’s fiscally irresponsible and dishonest. Privately built and operated public facilities always cost more, and always result in a lower quality of service.”

The issue of public-private partnerships is highly polarized, and is often characterized as a debate between big business and unions. Farkas felt there was a need for a more neutral source of information.

“My website provides concrete examples and objective evaluations of what goes wrong when public services are put in the hands of the private sector,” explains Farkas. “These deals don’t work because public services have objectives beyond turning a profit, such as social and environmental goals.”

The timing of Farkas’ website is not accidental. Starting this week and lasting until the end of February, the Capital Regional District will be holding public meetings to discuss public-private-partnership options (also called procurement options) for their new sewage treatment system.

The Capital Regional District is being forced to explore privatization options by the BC Government. The Province has linked their $300+ million contribution to the sewage treatment system to it being built and run by the private sector, unless a “compelling reason” to keep it public can be argued.

But it will be virtually impossible to get a “compelling reason” accepted, since the BC Government and Partnerships BC (their pro-privatization wing) are the judge and jury. And, the Province passed a law banning the use of alternative approval processes (APP) to stop this kind of privatization. An APP was just used to halt the replacement of the Johnson Street Bridge, and requires gathering signatures from 10% of the electorate.

“It astonishes me that the BC Government is going to such lengths to push us in the direction of privatized public services,” says Farkas, “when there is no proof that privatization saves money, and ample evidence that it leads to lower service quality, accountability and environmental standards, and higher user fees.”

The most high-profile example of why privatization of public services doesn’t work can be found in Hamilton, Ontario. In 1994, a private company obtained a 10-year contract to operate Hamilton’s water and wastewater systems in return for promises of local economic development and cost savings. Instead, what citizens got was years of malfunctions that resulted in millions of litres of raw sewage backing up into hundreds of homes and businesses, and spilling into the harbour.

Raw sewage wasn't the only disastrous twist to this story. Mid-way through the contract, the private contractor started having debt problems, and sold the lease – to Enron. Over the 10-year period, the contract was sold four times (two of the owners are now bankrupt), and city officials and citizens found it difficult to know who to contact in case of problems. Hamilton did not renew the private contract, and reported a savings of $1.2 million in the first year after the water and wastewater systems were back in public hands.

“Private operating contracts are like liquid gold to corporations,” explains Farkas, “because they represent a long-term, guaranteed cash flow. They are routinely sold or refinanced at a considerable profit – for shareholders, not taxpayers.”

Farkas finds it troubling that, at a time when cities in Canada and around the world are firmly rejecting the public-private partnership model, the BC Government is moving so forcefully in the opposite direction.

“For what it’s worth, we’ve got to try to bring some common sense into this discussion,” says Farkas.

That is why she is hoping people will attend the Capital Regional District’s
Procurement Open Houses this Thursday, February 10 and Friday February 11, and the Procurement Special Meeting on Thursday February 25, and fill out the online survey on the Capital Regional District’s website: www.wastewatermadeclear.ca.

She’s also inviting people to visit her site: www.smellsfishy.ca to learn more about public-private partnerships.

“Something smells fishy to me,” quips Farkas. “It’s time to expose the faulty logic behind this privatization push.”