P3s are not the answer to fast-tracking infrastructure investments
In an editorial published Saturday, the Vancouver Sun makes a good case for investing in infrastructure as a way of stimulating economic activity. But the editorial is off the mark when it claims that public-private partnerships (P3s) are especially well-suited for this purpose.
In fact a number of business leaders have recently argued that P3 arrangements will delay infrastructure spending because of the complexity of the deals and the shortage of credit.
The B.C. government recently raised the threshold value of projects to be automatically considered as P3s from $20 million to $50 million in an effort to accelerate projects -- a tacit acknowledgement that P3 schemes would slow down needed infrastructure investments.
The Vancouver Sun editorial's claim that P3s would favour local suppliers is highly questionable. In fact, the chairman of the Canadian Construction Association recently told a national conference that P3s would take away the "bread and butter" from most of his members.
Here's an excerpt from the Sun editorial:
Building and repairing bridges, roads, ports, hospitals, schools (especially their seismic upgrading in British Columbia), water and sewer treatment facilities, transit systems and other public structures not only creates local jobs and demand for goods and services from local suppliers, particularly for those projects that lend themselves to public-private partnerships, but gives a psychological lift to citizens seeing the work in progress.