P3s lead to delays in infrastructure spending

The B.C. government is increasing the threshold for provincially-funded capital projects that are to be considered as a public-private partnerships.

Now all public sector capital projects with a value of $50 million or more must be reviewed by Partnerships BC and considered to be built as a P3, unless there is a reason to do otherwise.

The previous threshold for consideration as a P3 was $20 million. Raising the threshold attempts to ensure that larger projects continue to be considered as potential P3s, while streamlining the process for smaller-value projects that would not likely be a good fit.

Projects between $20 million and $50 million will still be screened to determine whether a more comprehensive assessment of the project is warranted.

The policy change is part of the government’s commitment to accelerate capital infrastructure projects.

The BC health minister is pushing for a new hospital in Surrey to be a P3, even though a key committee of the region’s health authority opposed privatization.

Minutes of the Fraser Health Authority’s (FHA) facilities committee, obtained by the BC Health Coalition through freedom of information, show the committee “agreed that P3s are not the first choice of the committee.” Members concluded “a P3 strategy tends to be slower.” The authority’s facilities planning vice-president even argued that P3s bring “a lesser ability to control design, longer lead times and additional risk.”

But the health authority’s board overruled the committee, ordering more detailed study of a P3 option. The province’s health minister, George Abbott, now says he is confident the new $126-million outpatient hospital will be a P3.

The evidence against privatized hospitals sits right in the FHA’s own backyard, where the Abbotsford hospital has gone well over budget, is behind schedule and will have fewer beds as a P3.

"The biggest bang are the projects that will come quickly to the implementation phase."

Projects that will take too long to develop and obtain permits should be bypassed for others that produce quicker returns, he said.

That may also mean avoiding private-public partnerships, which due to their complexity and the credit crisis, take too long to finalize to generate the desire stimulative effect, Lamarre said.