Saturday, October 28, 2006

Campbell drops BC privatization bombshell

BC Premier Gordon Campbell has dropped a privatization bombshell - all provincial government projects over $20 million will be P3s - public-private partnerships - "unless there is a compelling reason to do otherwise."

Campbell's new rules will mean a huge boost in the number of P3s in BC and a welcome handout to scads of BC Liberal-friendly corporations eager to help separate taxpayers from their hard-earned dollars.

The announcement was made Friday at the Union of BC Municipalities conference in Victoria, where Campbell told local government officials that P3s are the new standard.

"There's one caveat and you're going to be hearing this a lot from me in regards to capital projects in the years ahead. We're going to insist on that one condition: Take a hard look at how that project might be built as a public-private partnership," Campbell said.

"We know P3s save money, transfer risk and add great value through design innovations and private sector ingenuity," Campbell claimed, despite much evidence internationally and here in Canada that P3s can be disastrous for taxpayers and governments as corporations cash in.

For example, the new P3 Abbotsford hospital is a classic example, as Murray Dobbin detailed in the Georgia Straight.

"Access Health Abbotsford, a private consortium created by several transnational corporations, was the only bidder. During the bidding and negotiating stage of the project, capital costs rose nearly 70 percent, from $211 million to $355 million. The yearly service payments to the P3 consortium doubled from $20 million to almost $41 million per annum, and total costs for the 33-year operational contract skyrocketed to nearly double as well, from $720 million to $1.4 billion," Dobbin wrote on December 29, 2005.

Surprisingly, the NDP opposition doesn't seem to have grasped the huge significance of Campbell's decision - that's the only way to explain the lack of a news release when one might expect them to scream blue bloody murder. NDP MLA and finance critic Bruce Ralston is quoted in the Vancouver Sun that Campbell's announcement is not a big change in direction.

Perhaps equally surprisingly, a former BC Liberal candidate is sounding a warning.

Saanich Mayor Frank Leonard understands that local government can finance a major project much more cost-effectively than a corporation - government borrowing power will always beat the rates that even a big multinational can get.

"I have a huge bias -- I don't think finance should be done by the private sector," Leonard is quoted as saying Saturday by Vancouver Sun columnist Vaughn Palmer.

Leonard is right but Campbell is already insisting that the province will only provide one-third of the funding for the much-needed Victoria sewage treatment plant if it's a P3.

And Transportation Minister Kevin Falcon is saying the same thing for the delayed Evergreen rapid transit line for the Coquitlam area - P3 or piss off.

CUPE BC Secretary-Treasurer Mark Hancock is also sounding the alarm in a news release that was ignored by the Sun.

“The premier has now said to municipalities, in effect, ‘you no longer get to decide how your infrastructures are built - Partnerships BC will decide for you’," said Hancock. “Well, it might be a great day for bankers and investors, but it’s a lousy day for municipalities who have just lost even more of their already dwindling autonomy.” See:

Yes, the Premier's ideologically driven insistence on P3s means bad news for the rest of us.

And it brings to mind the old adage - Follow The Money.

1 comment:

Budd Campbell said...

This is a big issue, alright, and it should be getting much more attention, I agree.

However, sometimes people don't want to make a fuss about a P3 if they like the facilities involved. That's certainly the case in Maple Ridge where the "town core" project became a notorious P3, written up by CUPE as "Secret and Illegal", and found to be in contravention of statutory requirements when present Mayor Gord Robson took the municipality to court over the matter.

Yet many NDP supporters who liked the new local arts centre that was part of the project didn't want to make too big a fuss about the overall town core project. I guess they didn't want to throw out the theatre baby with the P3 bathwater.