Friday, February 27, 2009

Kevin Falcon's A Bridge Too Far - $3 billion Public-Private-Partnership Port Mann bridge deal collapses! BC taxpayers to go it alone


Breaking news - BC Transportation Minister Kevin Falcon's much-vaunted $3 billion Public-Private-Partnership deal to build a new Port Mann bridge has collapsed - leaving BC taxpayers to pick up the entire project.

Falcon announced late Friday that the province could not reach a deal with a private consortium that was going to build the new 10-lane bridge - with a rapidly expanding budget that jumped from $1.5 billion to $3 billion in just eight months.


“We would've liked to have gotten to an agreement," said Falcon. "We had a memorandum of agreement, but ultimately we were not able to come to closing terms, and that's just life."


Falcon claims that any cost overruns or construction delays will be the responsibility of Peter Kiewit and Sons and Flat-Iron Constructors Canada, the two contractors.

But the news has drawn fire from both the NDP and the Canadian Taxpayers Federation.

"If you can't get financing for this kind of a project, where there's a guaranteed source of revenue over a lengthy period of time, what project can you get financing for?" said NDP Finance critic Bruce Ralston. "So we're back to government financing, but we've been delayed for years by this minister's stubborn insistence on doing it a different way, which has completely failed."

Canadian Taxpayers Federation BC director Maureen Bader calls the government's approach "too risky."

"If it's too risky for a private sector company then it's also too risky for the taxpayers," said "So I think now is not the time to be going forward with these projects — to increase the debt even more than what we are already looking at. "

After an initial all private deal also fell through, BC announced it was going to provide one-third of the financing while a group of private developers was slated to provide the remaining two-thirds.


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29 comments:

Anonymous said...

Does this mean that the troubled financial backer Maquarie Group is out of the project?

Anonymous said...

Falcon's Folly - - A Bridge too far for sure. There was a rather crude joke about the old Ford Falcon which seems to be coming true with Falcon and his portfolio - - except it is the taxpayers and the bridge users that will be getting screwed.

Anonymous said...

And to think that Carole James had just flip flopped and decided to endorse this deal. If only she had waited another day.....

http://www.straight.com/article-203869/kevin-falcon-slams-carole-jamess-port-mann-backflip

DPL said...

And all the time we have heard about how great 3P's are for all parties. Time to go back to the twinning idea or leave things as they are until the province gets out of the present deficit situation. Maybe now the goofy thoughts of Falcon and his boss can be finally put to rest.

Anonymous said...

So let me get this straight...

The NDP has opposed the Port Mann Bridge upgrade over the past few years. Transit... NOT freeway expansion, the NDP says!

Yesterday, Carole James flip-flopped and has now come out in favour of Falcon's 10-lane freeway behemoth.

The NDP opposes P-3's as government can finance projects with cheaper interest rates.

Today, the government announces that it will entirely finance the Port Mann Bridge and the NDP now opposes same because it should have been a cheaper P-3 project?

This certainly sounds like a comedy movie extraordinaire!

NRF said...

What happened to the idea for open competitive bidding? Peter Kiewit and Sons and Flat-Iron Constructors Canada were chosen in 2008 to build something but the projects form, design and ownership has changed so materially that it is a different project.

Is should be impossible for government to spend 3 to 5 billion dollars of public money without an open and transparent competitive bidding process.

Anonymous said...

The Port Mann Bridge (and RAV for that matter) were not P-3's in the real sense because the banks would not loan money to the projects.

RAV is a case in point. SNC Lavalin could not raise funds from the international banks to fund just a small portion of RAV. SNC's partner SERCO (an international train operating company) could not either and jumped ship.

Campbell then raided the public sector pension plans to come up with the money, which was then funneled (some say laundered!) through InTransit BC to SNC.

The reason the international banks would not touch RAV is that they understand P-3's and RAV, being a metro, was just a very poor risk. With the successful Dublin and Nottingham LRT P-3's (both are making an operating profit after paying debt servicing)as a precedent RAV just did not have the ridership to sustain a projected $2.5 billion (over $7 billion including debt servicing)transit project.

RAV is not a P-3 as the taxpayer is not protected. RAV is a Premier's Pet Project or piss poor ponzi-scheme-3!

The Port Mann mega-bridge (& the Evergreen Line)is more of the same, a bridge too big and not cost effective.

Carole James looks like a fool

http://railforthevalley.wordpress.com/2009/02/14/carole-james-the-ndp-have-they-missed-the-train/

in all this and one wonders can the NDP dump this lemon so late in the game.

The media also deserve to be chastised as they have failed to do any investigating of P-3's and just repeat the Libs. mantra.

Anonymous said...

A bridge too far, Nah, A report too late, Yes. I'm quite sure that Larry Blain of Partnership BC read this report, so too did Kevin Falcon, but both of them sat on it while the BC Liberals presented their budget earlier this month.

Is there going to be a $400 million deficit budget next year, or with the $900 million olympic security cost going to push us into a $1.3 billion one along with the added cost of the Port Mann Bridge going public rather than private for yet another $1.3 billion? As quickly as the price tag on the Port Mann Bridge has escalated, so too has the real budget...... dare I say Fudget Budget.

RiskMetrics Questions Sustainability Of Macquarie Model
Friday, April 04, 2008 1:24 AM



"SYDNEY -(Dow Jones)- New York-based corporate governance service RiskMetrics Group Inc. (NYSE:RMG) (RMG) has delivered a scathing critique of the infrastructure investment model that was pioneered by Macquarie Group Ltd. (Australia:MQG) (MQG.AU), and has been emulated by Australian peers such as Babcock & Brown Ltd. (Australia:BNB) (BNB.AU) and offshore investment banks.

The report titled "Infrastructure Funds: Managing, Financing and Accounting - In Whose Interests?" raises concerns about the sustainability of the asset manager model for infrastructure, where a sponsoring manager - usually but not always an investment bank - acquires assets and then on-sells them into a separate fund or listed entity but retains management rights."

SNIP

peter kelly said...

The NDP does not support P3...end of story. If we're to have a new bridge, then the NDP supports the public financing model to save taxpayers some money. What the NDP is doing now is bashing the BC Liberals with some overdue attacks over their ideological driven P3 failures - and rightly so. Go Get 'em Carole!

romeogolf said...

I find Carole James is quite inept on this issue. I don't know who she is getting her advice from, but they should be fired. Clearly, they do not understand transportation. Supporting this bridge just seems to be an opportunistic political manoeuvre badly executed.

In light of our facing climate change and, according to the IEA, the peak of conventional oil in 11 years, we do not need to be digging a bigger fossil fuel hole with automobile-oriented infrastructure. Even Wired magazine gets it: http://blog.wired.com/cars/2009/02/art-center-summ.html!

For $1.5 billion, we could revive the Interurban from Chilliwack to Vancouver and have a brand new rail bridge over the Fraser. This would actually reduced greenhouse gas emissions are properly orient land development.

Gordon Campbell and Kevin Falcon have made it so easy to skewer the Liberals over the substance and handling of this scheme. Gateway (yesterday's solutions to yesterday's opportunities, long since past) strikes at the heart of their ability to lead the province. This should be a major election issue. The Libs talk green, but put our money into subsidizing blacktop, farmland-destroying sprawl, oil & gas, and ruin-of-river private power. This is so 1950s!

Anonymous said...

KEVIN FALCON . . . "The Best Future Premier money can buy"

The GREAT SATAN

I endorse Kevin fully and without reservation for any high value $$$ job he wishes to take. . . E.B. Spiderman

Anonymous said...

I posted this at "Paying Attention" site as well.

We have a $3 000 000 000 bridge and a toll of $3. That's 1 000 000 000 trips across the bridge. That's
3 000 years it will take to pay for the bridge if there are 1 000 000 crossings a year. Something seems out of whack with this project.
Perhaps the gov't is using the accounting techniques outlined in the cartoon "Non Sequitur" for Feb. 28, shown here,

http://www.gocomics.com/nonsequitur/

NRF said...

Since the bridge project has changed materially since the P3 RFP was issued, when will open competitive bidding begin for construction of the new single bridge project.

It won't?

Why?

DPL said...

The article mentioning the backing out of the company appeared in the T/C this morning. Not anywhere near the front page. About one inch high and a couple of lines total. hey it's only a few billion dollars of taxpayer money

Anonymous said...

Let's get this straight: Larry Blain is the highest paid civil servant in the province at $500,000 + per year. http://www2.canada.com/vancouversun/pdf/salgov3.pdf He makes more than Elton and whoever is in charge of Lotteries now that Dana Hayden has moved on. What is this guy doing to deserve his salary? At least Elton is expected to deliver $400 million to the provincial treasury.

Anonymous said...

Is the off-site work going to be done in B.C., or elsewhere? 8,000 jobs? Pure fantasy. How many workers will Falcon be flying over from Germany to do the job? Or, will it be the 30,000 Filipino workers that the B.C. Gov. has been soliciting for in Manila?
Not the best time to be spending that kind of money, that's for sure.

Anonymous said...

Bill T--This proves that p3s cost us more in the long run,alot more,it also proves that projects can be guaranteed at a price without being p3s!
So the business case for p3s have now been smashed,it also proved that we have been way over-charged for the p3s.

The port mann is not an election maker,it`s a breaker,no NDP voters are going to switch to the Liberals because of the bridge,but it sure has pissed off many voters,many liberal voters,many green voters who may may have pondered voting liberals and most importantly he has pissed off the TRUE conservatives in the party!

Evergreen line,same thing,it still needs 200 million dollars and construction isn`t even to start until 2011,where have we heard that before,BC place roof,it`s not a priority for anyone in bc or even in Vancouver.
Campbell has made another critical error,5 billion more debt dollars for metro Vancouver(that all tax payers will have to pay)

North Van's Grumps said...

There were two other companies shortlisted by the Provincial government to build the Port Mann Bridge, both interested in the P3 aspect of doing business in BC.

Why has Highways Minister Kevin Falcon gone so quickly to the public treasury with its Triple AAA borrowing rating to bankroll the project instead of going with others that were found to be acceptable..... especially in light of the fact that they had each put up the required $1 million dollar fee to get in on the ground floor bidding war?

Connect BC Development Group is out of the contest, but only because of Macquarie's inability to secure a reasonable amount of cash via their credit line for another long term investment, which would make the Port Mann Bridge, and its 37km attached highway, number 12 in tolled highways that it would have in its stable.

Second place honourable mention:

"Gateway Mobility Partners is comprised of Cintra (Concesiones de Infraestructuras de Transporte) S.A. and Skanska Infrastructure Development, AB."

Third place Honourable Mention:

"Highway #1 Transportation Group is based in B.C. and is comprised of Bilfinger Berger Group and Transurban Group. Transurban is a toll road investor and operator."

Anonymous said...

How about the Evergreen Line? Another P-3 Premier's Pet Project fiasco. On another blog someone says that the $1.4 billion SkyTrain will replace a bus route carrying about 1,500 people per hour in the rush hours and says SkyTrain is a metro and needs 15,000 people a hour to justify construction.

Um - er - is this another FastFerry style fiasco in the making and why is no one else in the USA or Europe building with SkyTrain?

Also Translink will be in the hole next year to the tune of $300 million to $400 million, would not some of that Gateway money be useful for TransLink?

Why are we building a new bridge -

a) While the Puttallo rots away and falls down

and

b) Before the Golden Ears Bridge is opened, which I understand will take a lot of traffic off the #1 and Port Mann.

Is Campbell building a monument for himself with a new mega-bridge before he retires to the delights of Maui?

http://railforthevalley.wordpress.com/2009/02/06/premier-campbell-kevin-falcon-flips-the-bird-to-the-valley/

Anonymous said...

9:48 pm is dead wrong. My brother in law has voted NDP his entire life and is holding his nose to vote Liberal for the first time 100% because of the new bridge. Even I was amazed that a bridge could do that. Although now that Carole James says she supports the bridge he might stick with the NDP. He drives a refrigerated delivery truck and has eve missed his kid’s own birthday party because of that stupid bridge.

DPL said...

Speaking of buying votes. The fellow Anon 8.28 AM mentions his brother in law will be voting Liberal while holding his nose. Wonder if his relation will be pleased to see the bill for the provincial taxpayers when it's in place. And of course the dollars in interest to pay for the thing.

A three dollar toll each time will still take a lot of traffic will be needed. Does he realy believe a large truck and a small car will be paying the same amount?

Anonymous said...

One more time folks, its not the bridge alone that is being tolled, so too is the 37km highway from "new" McGill interchange at the south end of the Second Narrows Bridge to 2176h Street near Langley. Its going to be a double whammy for motorists, there will be no alternative route. The Pattullo Bridge is not going to be built by TransLink. The Golden Ears is a tolled bridge, so it doesn't matter which way you want to go to Vancouver via a highway, the cost is still going to be $3.





From Partnership BC Project website

"Description:

The project includes widening of Highway 1, building a new bridge at the Port Mann crossing, upgrading interchanges and improving access and safety on Highway 1 from the McGill Street interchange in Vancouver to 216th Street in Langley, a distance of approximately 37 kilometres.





Using Highway, even for a kilometer, is going to cost $3, unless its like the UK system where a portion use costs less.

Anonymous said...

MAYBE ACCENTURE WILL STEP IN

Anonymous said...

Why doesn't the NDP just guarantee that the new bridge won't have ANY tolls.

That should win them the election.

Anonymous said...

Its a good thing for sure as P3's are just more of the Secret or better yet more of the Lie, as if your living a Secret then your living a lie no doubt. And that Public-Private partnerships where the public is keep further in the dark just makes it that much more of a risk and another way for Governments actions along with Business to go without accountability. Business needs to stay out of Public and Public needs to stay out of Business no doubt.

Anonymous said...

On Second thought it might of been cheaper to house people and keep them being so destitue. And maybe the bridge would not have been some poor man's refuge from the elements but a way to get home . And now its going to cost billions. Now how smart is that? Yes Its beginning to look like more of a Brige Over Troubled Waters.

Anonymous said...

Everybody agrees that money needs to be spent to get help move our economy forward and the best way to do that is with infrastructure spending. This seems like a pretty solid piece of infrastructure to spend money on and those that think it is a waste of money clearly live on bowen island and don't ever come off. This bridge is long overdue.

Now with regards to all the jobs created no doubt the majority of the work will go to British Columbians. But of course there will be some need to bring in foreign workers. It's called having expertice at building specific parts of massive bridges. So instead of using our in-house talent you contract out so you get the project right! Seems like a pretty simple concept. Maybe if the NDP had thought about that when they built their FastFerries instead of listening to the little union boss on their shoulder.

Anonymous said...

8000 jobs for the Port Mann,now that is a sick joke..

Today Falcon in the legislature said " The sea to sky highway project creared 6000 jobs"

The gplden ears bridge is another 5000 jobs, well well well, so the sea to sky upgrade is almost completed,the golden ears bridge is almost completed.....

So Kiewet construction who is doing the sea to sky and the Golden ears bridge and both projects are ending soon,their ending just in time to work on the PORT Mann bridge?

So there will be no new workers,seems like the Campbell goverment is only interested in keeping the same "good ole boys' working,and where are all those Keiwet profits going? Omaho Nebraska!
But I do find it amusing to imagine 8000 workers with ropes,levers,pulleys,picks and shovels building the port mann bridge.
The numbers are cooked,they are counting every thing possible,even if someone works for a day in some capacity on the bridge it counted as a job!

At least Keiwet has somewhere to send their workers,but if anyone thinks Keiwet will be hiring thousands of workers is dillusional.

Anonymous said...

on time on budget is what the Port Mann Bridge will be in four years with 8,000 jobs created....

lets see, there are 365 days in a year which equals 365 man days


times four years = 1460 man days in four years

8000 divided by 1460 = 5 people will be building the bridge.