Alberta Infrastructure Minister Brian Mason says the NDP government won’t launch any new public-private partnerships pending a decision by executive council on their continued use.
Mason, who also serves as transportation minister, said he wasn’t declaring a moratorium on the P3s, but he planned to stick to the traditional methods of funding as he launches a five year, $34 billion capital construction program.
“I think there are real questions about the overall benefit that is received by P3s,” Mason said in an interview with the Calgary Sun. “Certainly, the design-build and operate model is not something I want to proceed with at the present time.”
“I have decided, as minister of infrastructure and transportation, that we’re not going to be proceeding with P3s, in the meantime, until a final decision has been made.”
He was quoted as saying it was unlikely he would release the report publicly because it draws heavily upon confidential Treasury Board and cabinet discussions. He also confirmed that the government will continue with existing P3 projects approved by the previous Conservative government approved projects.
“I certainly don’t want to cast aspersions on the good work that’s being done by P3 contractors right now for us on any of the projects, but I think it’s fair to say we’re likely to go in another direction going forward,” he said.
The NDP curtailed funding to the strategic partnerships office, which assesses and manages P3 projects, by nearly half this year in the April 14 budget and allocated no funding for the office in its ministry plans for 2017 and 2018, the Sun reported. The office’s integration within the ministry’s corporate strategies and services division will result in savings next year of $325,000.
However, the leader of the Canadian Council for Public-Private Partnerships (CCPPP) has expressed concern about the Alberta government’s decision.
“We are encouraged to hear Alberta Premier Notley has not given up entirely on public-private partnerships (P3s), CCPPP president and CEO Mark Romoff said in a statement. “In fact, we would agree with her when she says governments ‘have an obligation to review all types of alternative financing arrangements’ to address infrastructure needs. We are concerned, however, that the premier may not have been well briefed on the full benefits of the P3 approach.”
“We are disappointed to hear that Minister Mason has declared a moratorium on future P3 projects in Alberta. Unfortunately, we are not in a position to comment on the specifics of the decision because he has chosen not to release details of the P3 review he requested. It is equally difficult for us to say whether the findings are thorough or valuable since it’s not clear that the P3 industry was consulted in the course of the internal review,” explained Romoff.
A 2014 value for money assessment that looked into using the P3 model to design, build, finance and maintain 19 schools determined it would cost more over 32 years than the traditional design bid build approach.
It suggested it would cost $570.7 million under the P3 model compared with $566.6 million under the traditional model.