P3s are ‘bad business’

Source: Larry Hubich, Regina Leader-Post, October 28, 2013

Among the many issues addressed in the provincial government’s recent throne speech was building new schools in our province using a P3 privatization model. But what do P3s mean for us? Sometimes misleadingly called public-private partnerships, P3 privatization deals involve signing complicated contracts with construction and supply companies, where the companies construct and operate buildings and then lease them back to the government. Of course, companies only agree to participate in projects that are profitable, and corporate profits add significantly to the cost of construction. Instead of simply paying for construction, taxpayers are forced to pay for construction and corporate profit.

In Alberta, a number of P3 schools have been constructed since 2007. Before the projects even began, early estimates were that P3 privatized schools would cost 51 per cent more than publicly-built and operated schools. In 2007 alone, the budget for the P3 schools project rose from $200 million to $512 million. Three schools could have been built using conventional government construction deals for every two schools that were built under the P3 privatization scheme.

What’s worse, cost-cutting measures at one school, including the use of substandard roofing materials, caused the roof to leak only six months after it opened….