P3s cost more, says prominent B.C. forensic accountant

consistent pro-privatization bias in the way that the B.C. government (through Partnerships BC) compares costs when assessing major projects. On top of this, the B.C. government is routinely denying access to critical information, which limits the public’s ability to know that its interests are protected on P3 projects.

Commissioned by the Canadian Union of Public Employees, the study was conducted by noted forensic accountant Ron Parks and his colleague Rosanne Terhart.

It is not the first time Parks -- known for his work on the Nanaimo bingo scandal that brought down several senior New Democrats -- has raised questions about the cost of public-private partnerships (P3s).

Parks looked at four recent P3 infrastructure projects in B.C. and said they all would have been cheaper through the traditional route of direct government procurement.

He and Terhart studied the Abbotsford Hospital, the Sea to Sky Highway, the Canada Line and the Gordon and Leslie Diamond Health Care Centre.

As he released the report Thursday, Parks said he thinks an independent party, such as B.C.'s auditor-general, should take a detailed look at all P3 projects.

...the Auditor General’s process used to review three major public-private partnerships (P3s) – the Abbotsford Hospital, the Sea-to-Sky Highway, and the Canada Line – “does not provide assurances that there are going to be real cost savings for the public.”

In all three cases, the Auditor General did not prepare a direct independent audit but instead reviewed value-for-money reports prepared by organizations that manage or promote P3s.

Partnerships BC – the government agency mandated to advance P3s – prepared the Abbotsford Hospital and Sea-to-Sky Highway reports. The Canada Line report was prepared by Canada Line Rapid Transit Inc., the Translink subsidiary responsible for implementing the project.

In two of these cases, the Auditor General’s office was also paid a fee to conduct the reviews – a practice Parks says should stop in order to heighten the public’s perception of independence.

Parks recommends that the Auditor General prepare his own direct reports on P3s “to distinguish his information and conclusions from those who have a vested interest in demonstrating the value for money of the P3 model.”