Before damning something, we should always be careful to say what we are talking about. The recent report of the Auditor General of Ontario has brought about a spate of discussions about public-private partnerships which seem to deal with many different relationships between the public and private sector. Having been party to the seminal report on the advantages of public-private partnerships almost 30 years ago: The Business Venture Project, we have reason to complain.
Partnership implies a collective responsibility and decision making that does not seem to apply to the current form of public-private partnerships. In fact today, any project involving government seems to end costing the government more money than it should if it were a true partnership. Two outstanding examples of this in Ontario are SkyDome in Toronto and the Express Toll Route 407 that started as a Toronto highway bypass.
SkyDome was budgeted at a highly optimistic $150 million when the Bill Davis Conservative government partnered with the City of Toronto and 29 private companies. The companies only needed to kick in $5 million each for advertising and Skybox rights. When SkyDome was finished in 1989, the David Peterson Liberal government had to swallow $420 million in cost overruns. It was also about this time that other companies realized what a sweetheart deal the original 29 companies received.
Yet it was the Bob Rae New Democrat government that sold SkyDome to a private consortium for a fire-sale price of only $151 million. By the time the Rogers people got their hands on it, the price was down to only $25 million.
You would have expected the Bob Rae government to be loathe to continue with public-private partnerships. Yet it went along with the Highway 407 Express Toll Route that was built during their brief tenure. It was the Mike Harris Conservative government that came up with the idea of leasing. They got $3.1 billion for a 99-year lease of the entire 108 kilometre highway, from Highway 403 in Burlington to Brock Road in Durham.. The Dalton McGuinty Liberal government realized that the consortium is obviously on to a good thing and while paying the consortium for collecting the tolls, the government will get the money from drivers using the eastern extension to Highway 115 that is now under construction.
As you can see, it hardly matters what team sweater your politicians are wearing. When it comes to the Ontario version of public-private partnerships, it will always be the taxpayers who will pay in the long run.
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Copyright 2014 © Peter Lowry
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