I congratulate Governor Schwarzenegger on his commitment to public-private partnership. In B.C., public-private partnerships ... have driven millions in taxpayer benefits.
California governor Arnold Schwarzenegger may also be Hollywood's fearsome Terminator but when it comes to politics, he's met his match in British Columbia's Gordon Campbell - the Premier Fabricator!
Last week, Schwarzenegger told Californians that, thanks to Campbell, he had the solution to their massive $14-billion budget deficit and $500-billion infrastructure needs - public-private partnerships or P3s like those used in B.C.
But there's only one problem - the Premier Fabricator has pulled the wool over the Terminator's eyes about the alleged success of P3s.
And if Arnie follows Gordo's advice, California voters may say "hasta la vista, baby" on Judgment Day, the next state election.
Here's why: Despite Campbell's boasts, public-private partnerships don't work.
In the vast majority of examples here in B.C. and elsewhere, the costs are higher as the public gets hosed to provide private corporations with substantial profits.
Look at some of B.C.'s own bad examples.
The Abbotsford Hospital and Cancer Centre was to cost $211 million under the original P3 budget and open in 2005 - the current estimated cost is $355 million, a 68 per cent jump, and it will open this year instead.
The William Bennett Bridge in Kelowna - priced at $100 million, now estimated at $170 million, up 70 per cent.
The rapid transit Canada Line to the airport was budgeted at $1.55 billion but will now cost $2 billion, or 29 per cent more.
Or look to Brampton, Ont., which was promised a new P3 hospital with 608 beds for $350 million. It now has a hospital with just 479 beds for $550 million.
The higher costs only makes sense because can any corporation, even the world's largest, borrow money at lower interest rates than a government? Of course not, but these enormous capital projects require significant loans to be completed.
The real reason governments use P3s is to take public infrastructure costs off their books and falsely claim they are balancing budgets and reducing debt. In reality they are borrowing money at higher rates over longer periods of time than if they had done them as public projects.
Schwarzenegger admits P3s could be a problem in California.
"Right now, it's such a new concept for our legislators that they're not there yet 100 per cent," the governor said Nov. 27. "They're concerned about it, they're suspicious about it, what it means, and so I think it will take a bit of time."
Watch out, Terminator! The Premier Fabricator may not be a muscle-bound cyborg, but when it comes to using P3s to separate taxpayers from their money, he knows no equal.