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The secrecy associated with P3s becomes even more important when information about contract costs becomes public. In one British P3, for example, it cost $948 to install a new lock.
Ottawa (04 Nov. 2014) — A report released last week from two economists in Montreal found that the Quebec government could save as much as $4 billion by buying out the P3 contracts for two Montreal hospitals, the McGill University Health Centre and the Centre hospitalier de l’université Montreal.
This would be similar to experiences in Britain and France where governments have saved money by buying back P3s.
Savings would come from lower interest costs and from avoiding the type of inflated maintenance charges that come with P3 privatization schemes.
Under the P3 privatization deals used, these hospitals private companies are responsible for designing and building them, as well as maintaining them for 30 years after they are complete. The cost of the hospital is paid back by the government over the 30-year period. Because governments can borrow money at a lower cost than the private sector can, borrowing costs for P3 privatization schemes are much higher than when work is done publicly.
This would be similar to experiences in Britain and France where governments have saved money by buying back P3s. For example, in Hexham, England, buying out a P3 privatization scheme for a hospital that cost $99 million to build will save $122 million.
Despite billions of public dollars being spent on P3s, privateers refues to disclose details about the project to the public
The study also illustrated one of the other problems with P3s — secrecy and lack of accountability. While the researchers filed access to information requests to obtain information about the cost of the P3, those requests were turned down.
“Even though the public are spending billions of dollars on the McGill University Health Centre and the Centre hospitalier de l’université Montréal, commercial confidentiality is more important than the public's right to know,” said James Clancy, National President of the National Union of Public and General Employees (NUPGE).
All of the secrecy associated with P3s becomes even more important when information about contract costs becomes public. In one British P3, for example, it cost $948 to install a new lock.
Secrecy and lack of transparency make it difficult to protect public interest
The secrecy that comes with privatization also makes it harder to ensure the public interest will be protected. Fraud charges have been laid against companies involved in the consortium building and the running the of McGill University Hospital P3, and against the hospital president and a consultant. Québec's auditor general reported that cost estimates for both hospitals were manipulated to favour the P3 option.
Sadly, these are not isolated examples. With the secrecy that surrounds privatization, it is hard to get financial information about privatization projects, but when the facts do become public the news is bad.
NUPGE
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE