P3s pooh-poohed

"The death knell of Regional Contractors." That's how John Knappett, one of BC Hydro Corp.'s newest board members, described public-private partnerships just six months ago. As we earlier reported, Mr. Knappett aired his concerns about those partnerships - which have been promoted by the Campbell administration - during a 2008 interview with The Business Examiner's Steve Weatherbe. But he elaborated on them in February while speaking to a local government committee about how the capital region district's new sewage treatment plant should be built.

In a document prepared for that presentation, Mr. Knappett stated public-private partnerships have meant "multinational construction companies that never really could compete against the highly competitive and efficient regional firms are now getting a huge slice of provincial spending and local firms that have contributed for years to local economies are being deal out."

He also questioned the "business models presented to bolster the case for P3's."

The government has said those partnerships result in projects that are a better deal for taxpayers, as well as being delivered on time and on budget.

Unfortunately, according to Mr. Knappett, most of the "evidence of P3 success is provided by the very entities that benefit most from the system including Partnerships BC."

That's the Crown-owned company chaired by Larry Blain, who is also now serving on BC Hydro's board of directors.

"I have been involved in hundreds of Public Infrastructure Projects over the years that were on time and on budget and I really have a hard time accepting that there is a problem in conventional delivery methods with Construction Risk," Mr. Knappett wrote.

However, in a recent interview with Public Eye, he clarified, "In the delivery of some very large projects, I think (a public-private partnership) probably makes sense for the owner and some of the ones we have done in British Columbia I don't think make sense."

The following is a complete copy of the aforementioned document, which was posted on the Canadian Union of Public Employees British Columbia Website. His presentation was recorded by Victoria Independent Television.

No Country for Old Contractors


The issue for the CRD's sewage plant project is not that it should be public or a P3, but rather should it be built at all?

There is no evidence of any harm coming to Juan de Fuca Strait from the two long screened outfalls. In fact, Minister Penner called for secondary treatment or equivalent, and as has been pointed out by scientific researchers such as Dr. Peter Chapman, the current real impact of the CRD's effluent on the marine environment could already be equal to secondary treatment anywhere else. For more info: http://www.aresst.ca and http://www.rstv.ca

As a public admin student, I've seen dozens of case-studies that show how P3 fail to live up to their "risk-eliminating" promise-- in fact, many like the Canada line are constructed to make sure that government pays for the profit-risk, through fare level subsidies. After two decades of experimentation with P3s in the commonwealth states and Canada, nearly all experts agree that their main benefit is their ability to reduce construction time at an only minimally higher cost. Partnerships BC is a blight on the public service in BC-- everything from its mandate to try P3s out on any potential procurement, to the absurd monetary incentives for its "CEO". Let's stick to procurement methods that we can stand behind.

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