The View from the West

Winnipeg Free Press - PRINT EDITION

City council should say no to P3 on water

By: Paul Moist

Posted: 07/10/2009 1:00 AM | Comments: 0 (including replies)

Winnipeg city council is poised to make a fundamental change in the way the city's water and waste system is operated. The proposed municipal corporate utility will reduce city council's role in running our city's water and sewer system while expanding the role private companies will have in managing these important public assets.

City officials argue that the new utility will be 10 per cent city owned, yet some $600 million in upgrades to the city's waste water treatment plants could be 49 per cent owned by "private sector partners." The utility will also depend on "strategic partnerships" with huge companies to deliver services through lease commitments over 20 or 30 years.

Unlike Manitoba Hydro, to which the utility has been compared, there will be no elected officials or public interest representatives on the proposed board of directors of the utility. It will operate to create profit as well as meet public interest needs. It will operate like a business and will partner with other companies to deliver services.

The city also wants to use a public-private partnership (P3) to upgrade the waste water treatment plants. The private sector should design and build the upgrades, but the financing and operations of the plants should remain in the public realm. The city can not justify paying private borrowing costs when the city can borrow for less. And operations and maintenance of the system should be kept in the hands of city workers who have the experience, knowledge and track record for providing these important services.

The city should abandon the expensive and risky P3 option, and tender for the design and construction of these upgrades without delay.

The city is set to give up council authority to set water and sewer rates to the provincial Public Utilities Board. Why? Is the PUB a way to save citizens from their own elected council which has jacked up rates and transferred some of the revenues to general revenues? Council deserves some criticism for past errors, but passing the buck to the PUB is not the answer. If city council wishes to retain control over the long-term capital program for Winnipeg's water infrastructure, as it says, then it should retain control, and the public scrutiny that goes with it, over setting water and sewer rates.

The utility structure city council is contemplating is unusual in Canada, where there is a commitment to and track record of public ownership of these services. If this new approach is such an efficient way of delivering services, why is it not being practiced elsewhere? If the utility is a good idea, it does not have to be rushed through council and it will stand the test of public questioning.

Running Winnipeg's water system is a significant public responsibility and our community has benefited greatly from the commitment to public delivery of services by previous city councils. As in the past, the private sector will continue to play a key role in the capital improvements required by the system. But North America is full of examples where private financing and operations have sent costs sky rocketing. And in terms of accountability, relinquishing or relaxing public oversight is a risky decision -- one that we will most certainly come to regret.

Poll after poll tells us that Canadians value water and recognize that water related services are critical for the public well being in communities, be they big or small.

A recent Nanos survey found that 76 per cent of the public respondents trusted public delivery more than private for drinking water and sewage treatment.

If city council wants a world class utility, it should shed old notions that private companies are the solution to today's infrastructure and public service needs.

Instead we should be creating a management mechanism that builds on local experience and expertise, citizen understanding and informed support, and a commitment to long-term public benefit.

Paul Moist is president of the Canadian Union of Public Employees, a Winnipeg resident and a former city employee.

Republished from the Winnipeg Free Press print edition July 10, 2009 A11

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