Thursday, June 13, 2024

Is P3 Funding Really The Way to Go?

By Stephen Vance, Editor

It was with some amount of concern that I listened to Meaford CAO Frank Miele pitch the concept of P3 Funding to council on Monday night as a potential solution to some of the infrastructure needs within the municipality.


Specifically Miele talked about the possibility of utilizing this “Public, Private Partnership” model to realize the construction of a new library, and to finance upgrades to our waste water plant.


On the surface the plan sounds like a reasonable solution. Find a private partner willing to finance the design and construction of a new facility, the community gets a new library, and the municipality doesn’t take on a debt load. Officially at least.


But such a partnership isn’t restricted to financing design and construction. In his report Miele clearly states “a private proponent designs, builds, finances and operates/maintains (20-30 years) a given infrastructure asset”


Operates and maintains, sounds like privatization to me. And while I support the privatization of many things, libraries are not one of them.


The P3 funding model is not without it’s critics and issues.


The most common concern with regard to P3 funding is cost. With a little poking around on the internet one can find a multitude of articles calling attention to the high cost of funding government projects in this way.


For example, in a 2008 report by Ontario Auditor General Jim McCarter he concedes that the first hospital in Ontario built under the P3 model, the Brampton Civic Hospital, ended up costing hundreds of millions of dollars more than if it had been constructed through a more traditional publicly funded approach.


The government officials responsible for administering the P3 program have said that the problems that have been identified in the past that have caused huge cost overruns have been addressed, but we’ve all heard statements like that before.


Another concern is control.


When a municipal or other government enters into a Public/Private partnership contract, they are committing to a 20 to 30 year relationship.


I would be leery of building a new library for our community knowing that a private partner would be calling the shots on the operation of the facility for the next 30 years.


If there is money to be made in the library business, then the private sector would already be building libraries all over the place. But they are not. Which in my opinion supports the cost overrun argument.


If the private sector isn’t currently in the library business, why would they enter into a partnership with a municipal government to build and operate one? Obviously it would be because there would be money to be made.


But if the money wasn’t there to be made beforehand by a private sector organization, then where does the money come from in a P3 arrangement?


I think you can figure that out yourself.


I’m not suggesting that the P3 concept be dismissed without discussion, but I would suggest that the CAO has given our councillors a ‘heads up’, and those councillors had better do their research and get to know what P3’s are all about before they ever get to the point of casting a vote at the council table.


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