The assurance of ongoing maintenance and repair are among the benefits of P3 projects, says Sabrina Gherbaz in Financial Post

P3 Deals Still Under Scrutiny

April 22, 2009

While many proponents favour public-private partnerships (P3s) to build and repair infrastructure in Canada, some detractors do not.

In a recent report that assesses the value for money received by taxpayers in British Columbia for four major P3 projects, the Canadian Union of Public Employees' B.C. division joined the dissenting community. But supporters say that because P3 projects mandate that private partners assume high risk and incur penalties for non-completion or poor maintenance, the model is more viable in the long term.

For instance, most private partners in an infrastructure project are responsible for its operation and maintenance for terms up to 30 years, says Sabrina Gherbaz. "One of the big benefits in my mind of the P3 model is that there are ongoing maintenance and repair obligations, ensuring the public that the road or hospital is going to be maintained for 30 years. Historically, our governments have deferred repair and maintenance of core assets to a point well into the future when they fall into disrepair. This doesn't happen to public-private partnerships because if it's not maintained in good repair, they start to deduct from the monthly payments" being paid to the private partner.

Infrastructure Ontario (Ontario's equivalent to Partnerships B.C.) has a somewhat different approach to evaluating cash flow and project costs along with a comprehensive risk matrix, adds Sabrina. "I think that's why we've seen next to no criticism from CUPE here."


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