Drop the rhetoric: P3s work

Opinion

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This article was published 31/05/2023 (858 days ago), so information in it may no longer be current.

RE: P3 process is bad for Manitoba

As the leading public-private partnership (P3) organization in Canada, representing Canada’s public and private sector industry, we would like to take the opportunity to correct some misinformation printed regarding the P3 model.

The challenges in delivering large and complex projects has been well documented over the years, with many projects using traditional procurement models being delivered late and over-budget.

In Manitoba, the new Winnipeg Police Headquarters (two years delayed, $75 million over budget) and the Plessis Road Twinning project (almost two years late, with $8.4 million in cost overruns) are examples of how critical projects that are traditionally procured often run into these issues.

This is why the P3 model was successfully introduced in Canada more than three decades ago — to better protect taxpayers. Winnipeggers only need to look at other local projects procured under the P3 model, such as the Disraeli Bridges and Winnipeg Southwest Rapid Transitway (Stage 2) and Pembina Highway Underpass that stand in stark contrast to publicly managed adjacent properties.

The benefit of the P3 model is that governments can harness the experience, expertise and capital of the private sector and encourage the use of more innovative approaches and efficiencies by focusing on outcomes required for our communities to benefit and grow, rather than getting into the weeds of how to build and maintain it.

And most importantly, governments involved in P3s in Canada retain ownership of the asset. P3s are not privatization.

Unlike more traditional ways of procuring our infrastructure, P3s can bring together the design and construction of a project with the long-term operations and maintenance of the hospital, or school or highway. This means the people building the project are always mindful of their responsibility for its long-term maintenance. They have “skin in the game” to make sure the materials and approaches used are resilient, efficient and cost-effective for decades to come.

This unique approach incentivizes the delivery of high-quality infrastructure and services to Canadians. The private sector partner is paid based on their performance, meaning they must meet or exceed the contract requirements laid out by the public owner.

Let’s be honest, the current state and long-term viability of much of Canada’s infrastructure — including its schools — has been hampered when it comes to properly maintaining and upkeeping these critical assets. The benefit of the P3 model is that this cost is built into the contract right from the beginning — assets must be kept in like-new condition.

When we think of the places where we want for our children to be educated — we want them to be safe, we want the facilities to give them every opportunity, and we want our educators to focus on schoolwork rather than flaking paint, crumbling roofs and poor ventilation.

A recently published study in Ireland comparing their traditional schools with their P3 schools noted the impact traditional schools had on the education services, stating that principals “could spend money refreshing everything… but then [I] couldn’t buy new microscopes or maths sets” or that dealing with the operations and maintenance of the schools meant they would have “very little time to spend on the educational portion of [my] job”.

Bundling of schools does not exclude local contractors and trades; they are an important part of the partnership, such as in the Chief Peguis Trail Extension. Bundling does, however, create economies of scale, and means they can be built more quickly. This means children in Pembina Trails, Beautiful Plains and Brandon school divisions, for example, don’t age out while they wait for modern facilities.

Governments owe the public a diligent assessment when it comes to choosing the best way of procuring our infrastructure. Do the legwork to find out what delivers the best option for taxpayers. Compare, contrast and test.

Do not dismiss P3s out of hand, based on lack of information or understanding, when they are a proven and effective method of procuring infrastructure (300+ projects across Canada with a value of more than $139 billion). That attitude is simply unacceptable and only hurts Canadians in the long run.

P3s are not ideal for every situation. However, the evidence shows they do a far better job of staying on budget and on time than any other system that’s been utilized.

Quite simply, value for taxpayers is at the heart of the P3 model.

Lisa Mitchell is president and CEO of the Canadian Council for Public-Private Partnerships.