Rebuilding Canada: a look at P3s

Can P3s (Public-Private Partnerships) save our infrastructure? This is the focus of TC’s series latest story on rebuilding Canada. The second looks at the negative side of P3’s, with cost overruns and some projects ultimately having to be nationalized.

British Columbia has a mixed record with P3’s, as pointed in the article about its critics. We have Partnerships BC (which is being emulated in California) and a requirement that all large infrastructure projects be “evaluated” for being a P3.

Here in Victoria we have the new Save-On Foods Memorial Arena being run by RG Properties Ltd., after the spectacular collapse of the previous attempt at replacing the Memorial Arena under then Mayor Bob Cross. We also have the upcoming sewage treatment plant, which is likely be a P3, although not if the Keep our Water Public campaign succeeds. A recent poll also found that the vast majority of people wanted to keep any sewage treatment public. For the record, as a municipal candidate, I completely supported keeping sewage treatment public and I still hold that position.

With the world financial markets busy melting down around us, one of the biggest challenges right now for P3’s is simply getting credit. As Livable Blog points out, a number of the projects either in the construction phase or on the table in Vancouver are threatened by this. NowPublic also has an excellent post on the matter. It is highly conceivable that one or more of the companies involved in these deals could fail. Read the end of this story about the potential failure Macquerie Bank, a large funder of P3s around the globe. Now where would that leave the governments?

Overall, I wouldn’t want to be a company involved in a P3 or a government that might be left holding the bag if it fails. I guess there are small blessings to having lost the election. As for whether or not the credit crisis will stop the P3 steamroller, I guess we can hope.