READ THE FULL REPORT HERE.
HALIFAX—A new report from the Canadian Centre for Policy Alternatives-Nova Scotia office examines the Highway 104 Western Alignment highway, known as the Cobequid Pass Toll Highway. The report Highway Robbery: Public Private Partnerships and Nova Scotia Highways reveals that it cost $232 million more to build, finance, operate and maintain as a Public Private Partnership (P3) project than it would have as a government-financed, delivered, and maintained project.
Report author Christopher Majka explains: “The advantages often cited to support P3 developments—project delivery on time and on budget; cost saving; risk allocation to the private sector; provide now, pay later—have little to recommend them. They provide either no advantage or are as easily achievable through traditional government procurement. Additionally, the lack of transparency and accountability surrounding the P3 model is a significant drawback.”
The Sutherland’s River-Antigonish Highway 104 Expansion project is also being planned as a P3, for which the Nova Scotia government is currently receiving bids. A similar prospective examination indicates that it might cost $66.6 million more in interest payments than it would cost to finance the project through government bonds. Construction costs of the project as a P3 are $52.6 million more than what government currently pays for constructing identical lengths of twinned highway through normal procurement. These two items would add $119.2 million in extra costs to the project.
“If the government chooses to release the costing of the Sutherland’s River–Antigonish Expansion project along with a qualitative assessment of using a P3 over a public procurement model, then there could be debate on this topic—in the absence of this, a P3 model should not be used for this project,” says Majka.
The public’s primary concern with respect to highway construction and maintenance is safety. Safety has also been frequently cited by government as reasoning for using a P3 model. There are, however, no data in Nova Scotia to support the contention that a P3 contract is safer than any other section of twinned highway.
Steve Joy, a member of the Nova Scotia Highway Workers Union states: “This report shows that Nova Scotia’s track record with P3s is a road to ruin. We can’t afford to repeat past mistakes with the Sutherland’s River to Antigonish Highway 104 Expansion project.”
Joy continues, “Highway workers are very concerned that Nova Scotia may be repeating the negative experience with contracted out winter highway maintenance documented in other provinces. This raises serious questions about potentially worse highway safety that the government must address.”
The report concludes that the Nova Scotia government should cease using P3 highways and employ traditional public procurement, given that contracting out services through a P3 is more expensive than public procurement, has the potential to compromise highway safety, needlessly duplicates government services, and lacks mechanisms for public accountability.
“Public infrastructure and services should remain fully in the public sphere,” says Majka.
The Canadian Centre for Policy Alternatives is an independent, non-partisan research institute concerned with issues of social and economic justice. Founded in 1980, it is one of Canada’s leading progressive voices in public policy debate. The CCPA is a registered non-profit charity.
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