Mark Romoff, president and chief executive officer (CEO) of the Canadian Council for Public Private Partnerships (P3s), speaks to members of The Telegram’s editorial staff at their Austin Street offices main boardroom Tuesday morning about the benefits of P3s.
The event runs Wednesday morning, co-hosted by the council and the St. John’s Board of Trade, with provincial Transportation and Works Minister Al Hawkins set to give the keynote address.
“There is a lot of confusion around public-private partnerships,” Romoff said in an interview with The Telegram Tuesday.
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He said the approach is not being used for most of the major public infrastructure projects in Canada. And yet, while not the right choice for all public works projects, it is being used and deserves consideration, he said.
The council is made up of both public and private interests and counts 237 P3 projects across Canada, ranging from new schools to hospitals to IT infrastructure, where private companies are taking on more up-front risk, in favour of long-term return.
Romoff said P3s work particularly well in cases of larger, public projects ($100 million-$200 million or more), serving jurisdictions working on a tight budget.
“You’re transferring the risk over to the private sector and holding them accountable,” he said.
Let the private companies handle ‘on time and on budget,’ he said.
“If you’ve got private finance involved, those guys don’t want to see you incurring penalties, or (finishing) late, so you’ve got that additional set of eyes from folks who have skin in the game and whose money truly is at risk.”
Project descriptions and contracts governing P3 construction projects and operations vary widely, making apples-to-apples comparison difficult, but with one certainty: contract details around both long-term management and government input are essential.
Some questionable outcomes have put P3 projects in the headlines, such as in Nova Scotia, where 39 grade schools were set under a P3 approach, based on 20-year lease agreements. With leases expiring, taxpayers are looking at the costs, including purchase. According to the report, the total associated with one school (principal and interest) will run nearly $50 million (while the new west end high school in St. John’s was a $38-million capital cost up front).
Cases like this one are highlighted by individuals and organizations opposed to the P3 approach, including public-sector unions and NDP MHAs.
Wayne Lucas, president of the Canadian Union of Public Employees in Newfoundland and Labrador, said he believes — regardless of any objections — the provincial Liberal government will launch more than one P3 infrastructure project.
“I don’t know how much evidence we’ve got to bring to the table that public-private partnerships don’t work and they’re of detriment to the public,” Lucas said.
“They’ll put the money up front and you’ll pay through the nose.”
The government cancelled P3 contracting for four new long-term care facilities, which were started under the Progressive Conservatives.
According to Liberal Health Minister John Haggie, it was not about the fundamental approach. Instead, the specific contracts were too narrow in scope and, he said at the time, there was no proof they were the best value for money.
The government has said P3s are being considered as an option — one possible option — for financing projects.
RELATED LINK:
The Canadian Council for Public-Private Partnerships
pppcouncil.ca
