Taxpayers, bridges, and clear numbers

Hey there, time traveller!
This article was published 21/10/2024 (370 days ago), so information in it may no longer be current.

The City of Winnipeg is about to be the proud owner of a 30-year-old-bridge.

Kidding — what’s happening is that the Charleswood Bridge is going to be transferred to full city ownership.

An early web story on the transfer in the Free Press said, “The $45.8-million bridge, built via a public-private partnership (P3), opened on Oct. 24, 1995. The city made its final payment on the project during the 2024 fiscal year. Ownership of the bridge will be formally transferred to the city next year.”

Here’s a snippet from its builders, DBF Ltd. “The project was completed within one year, on schedule and under budget. It is one of the first projects in Canada, to be designed, built, financed and leased back as a private public partnership.”

The Association of Professional Engineers gave DBF and the City of Winnipeg a certificate of engineering achievement for the project in 1996, saying in the citation, “The Charleswood Bridge Project provides many advancements in the fields of engineering project delivery and bridge engineering, resulting in significant cost savings to the citizens of Winnipeg and Manitoba and also establishing an exportable technology for Manitoba-based firms.”

An article in the Heavy Construction News suggested the project cost $29 million and saved the city $2 million in the process.

So, it sounds like the bridge was a success.

But what’s harder to find is a concrete cost/benefit analysis, or even a full picture of the project — there are those that argue that success is hard to pin down.

The Uniter student newspaper argued in 2010 that “the Charleswood Bridge, a P3 made between the City of Winnipeg and DBF Construction in 1995, continues to cost the city $1.5 million annually. Those costs ensure regular maintenance on the bridge will continue until 2024.”

The Canadian Centre for Policy Alternatives wrote in 2014 that “The building of the Charleswood Bridge, which used a build-operate-own-transfer P3 model, is a case in point. We don’t know as much about this contract as we would like to, but University of Manitoba economist John Loxley reports that Winnipeg taxpayers are locked into an 11.05 per cent yearly interest rate — much higher than the going market rate.”

A CUPE study on P3s in 2020 argued, “In the case of the Charleswood Bridge, the City of Winnipeg is still paying 11.05 per cent in yearly interest to the private sector, while its own costs of borrowing have fallen to under four per cent. Since the city is locked in by contract, Winnipeg is unable to take advantage of these reduced interest rates.”

A 2008 presentation on privatizing utilities in Winnipeg saw CUPE arguing, “Look at the Charleswood Bridge as an example of how difficult it is to get contract information from the private sector partner and the city. This P3 project is also an excellent example of how much more P3s cost taxpayers — the bridge will cost Winnipeggers $11 million more than if it had been built with municipal financing.”

Some have argued that P3s should actually be called P4s — public-private profitable partnerships. Others have argued that the projects benefit from tighter budget controls by private businesses.

But one thing is clear: when they are undertaken, all the information has to be on the table, all of the contracts involved have to be clear, public and transparent, and proper apples-to-apples comparisons between the costs of proceeding through a P3 or a straight contract have to be done.

Perhaps the clearest rule should be, if you’re prepared to do business with government, you have to be prepared for all of the details of that business to be publicly available for taxpayers.