Local governments should beware P3 pitfalls

Duncan – Re: P3 community centre I have concerns about our elected officials pursuing a P3.

Do they have the expertise to fully assess the risks and benefits? Complicated contracts lead to a long and costly procurement process for P3s.

The federal government has tied capital funding to the use of P3s.

If our elected officials seek funds from the Building Canada Fund they will have to show that the option of using a P3 has been fully considered.

Monitoring and holding private partners to the performance specifications is actually quite costly and difficult to achieve.

Any details not specified in the contract become the responsibility of the government, since it’s the government that ultimately carries the responsibility for the service.

Ronald Aspin has studied the transfer of risk to the private partner and found “when it comes to engaging public-private partnerships it would appear local government is the most vulnerable to exploitation by a better skilled and more experienced private sector in terms of recognizing and allocating risk”.

An example of this is the Canada Line where the private partner carries 10 per cent of the risk as compared to the public 90 per cent.

The impact of international trade agreements is another issue.

Would we want a foreign country operating our community centre? And if we didn’t accept their bid would they sue us under NAFTA’s Chapter 11 or a similar law under CETA or the TPP? The long-term lease payments entered into with a P3 constitute a government liability and so need the consent of the electorate.

Educating the public to make an informed decision will be an absolute necessity.

Donna Cameron

Duncan