Selling BC

The BC Provincial Government has recently been turning more and more  to public-private partnerships (P3′s), which take the responsibility of building or running a project off its hands, but also take away  control. P3′s exist under the guise of a compromise between the public and private option,with part of the responsibility held by the government and part by the private company.

The BC Liberals have been indulging in P3 deals to the extent that BC is one of only two places listed in the ‘Specific Cases” section of the Wikipedia article above. (The other is Australia).

The BC Liberals claim that P3`s control cost, transfer risk from the public to the private companies, get better value for money spent, keep BC out of debt, and are more efficient.

However, private companies not only get far worse loan rates than governments do, they have to factor a profit into their expenses, thus making it impossible for private organisations to finish with lower costs than public ones.

While the risk is transferred to the private sector, the gain is transferred too, as is control. P3 contracts tend to be huge, encompassing the entire project in a single bid. This means that the smaller, local contractors are extremely outclassed, and the bids then go to huge multinational corporations, who often even bring in their own workers, so that local jobs are lost, and the money gained from the project moves out of the area and does not in any significant way go back into the community it gets it from.

The last time the BC government decided to favour big contractors over local industry was when they introduced the tree-farm system and gave away crown land to large lumber companies in multi-decade contracts. That worked….

Privately-run projects are less transparent than government-run ones, and far more potential for corruption, cutting corners, safety and environmental hazards and unfair labour practices exist. If the bottom line is profit, priorities tend to get a little skewed.

I`ve posted a link at the bottom of the post to a video by Blair Redlin of CUPE. I highly recommend you watch it (start 20 minutes in). He covers all these topics in depth, with power point to boot. It is longish, but fascinating.

By allowing private companies to gain a measure of control in an area they didn’t have access to before opens the door for full privatization.

This is less than stellar because the bottom line for private organizations is profit, and in many venues this can directly interfere with providing a service. If the operation involved provides some sort of essential or important service, than people who can’t afford the service won’t get it.

My point really is that the two sides look at the same issue through opposite sides of the lens. Private industry views it as a service provided to make money; government views it as money raised to provide a service. It is much more beneficial to the public if, regarding an essential service especially, the priority is on the service rather than the money.

If a privately-run service is run for profit, that profit goes to only one or a few individuals. Oftentimes these individuals are not even from the area. Public sector profit goes right back into the community to help fund that or other services.

The only reason that I can see for the Campbell government to make such a push for the P3 method is the kickbacks and support they would receive from the companies, and the lawyers involved in the lengthy negotiations. These would have to be substantial, because in making this push the BC Liberals have alienated the entire provincial construction sector, who are losing out on contracts they would previously have received, and were formerly very vocal Campbell supporters.

Further Reading:

• Construction Industry’s Case Against P3s
• P3 COSTS SKYROCKET
• Public interest compromised by government`s pursuit of `P3s`
• Flawed, Failed, Abandoned: 100 P3s – Canadian and International Evidence

A video – it`s long but tune in at 20 min in for a breakdown of the P3 flaws. I highly recomend it.

Advertisement