Gov’t should rethink P3 school model

Lost on many during the great Regina sewage treatment plant fight was the notion that each and every public-private partnership (P3) proposal needed to be assessed on its own merit.

This was because the Canadian Union of Public Employees (CUPE) truly saw the handful of CUPE jobs involved as the beachhead where all government P3 initiatives had to be stopped.

But while the sewage treatment plant fight might now be so much wastewater under the bridge, the public and other stakeholders are continuing to assess whether other P3 proposals are truly in their interest.

And when it comes to the Saskatchewan Party government’s plan to bulk-build-bundle (let’s call it B3) nine new schools, labour may find itself with some surprising allies.

The Saskatchewan Construction Association (SCA) has very serious misgivings about whether this P3 school deal is good for it ... or for that matter, good for Saskatchewan taxpayers. “No, I don’t like it,” said SCA President Mark Cooper.

Of course, this is what one would expect to hear from a stakeholder/ vested interested group, but Cooper’s argument is better than that.

While Cooper agrees that the long-term cost of such bundled P3 projects is likely to be more expensive, he sees a “counter-balance by getting a better product, a privately managed asset that “will receive more consistent and timely maintenance than a publicly managed one.”

Again, perhaps this is might seem a tad self-serving towards private contractors, but it indicates this particular interest group has no problem with the P3 concept.

Of course, there are some who will feel a lot more strongly than Cooper about the premium we might be paying under the P3 bundle model the Sask. Party government is touting.

At close to a $50-million pricetag per school, the proposed costs of the nine P3 schools do not compare favourably with the $40-million cost of the latest joint-use elementary school — Willowgrove in Saskatoon. There may be a premium for getting things done in a hurry, but a near-$10 million additional cost seems too much — especially when you consider that the Saskatchewan budget isn’t even as healthy now as when the government first rejected the P3 model for schools.

In fact, former education (now finance) minister Ken Krawetz rejected the P3 model for the Willowgrove school in Saskatoon in 2008 because of the costs. “It’s easy to say a P3 is a great idea in the first year when, in fact, over 25 years, it may not be such a great idea,” Krawetz said on Nov. 13, 2008. “So we’re not moving forward with P3s at this time.”

Admittedly, time has passed, schools in certain urban sectors of the province have gotten overcrowded (although perhaps the Sask. Party should have thought harder about that four years ago) and the government points to the Alberta success for P3 building.

But have they really worked in Alberta? Cooper said the Alberta Construction Association is already experiencing the frustration he fears will take place in Saskatchewan. In fact, a story in Sunday’s Calgary Herald suggests the 19 P3-model schools the government here is touting will likely be delayed because of a lack of bidders.

The issue construction contractors right across the country — from Vancouver Island to New Brunswick — have consistently raised is being cut out of being able to even bid on such bundled projects because the bundles are simply too big. Is this fair to a local small business in Saskatchewan? Does it help build the economy?

The problem is that if you are an electrical contractor in Martensville, you might have a reasonably competitive bidding chance for the school to be built in your community, Cooper said. But such a local electrical contractor might not be able to competitively bid as the electrical contractor for all the schools.

Sure, we’re all in a hurry to build schools. Should we be in that much of hurry if we cut out local contractors and pay more to do so?

If the SCA has a self-interest, it also has a shared interested with Saskatchewan taxpayers in that competitive bidding is what keeps the price of government contracts in line. Without it, governments wind up with messes likes Spudco.

So what was wrong with NDP MLA Trent Wotherspoon’s suggestion Monday of a cost-benefit analysis before we add a fourth ”B” to bulk-build-bundle ... bungled?

After all, when it’s more than the usual opponents telling you this type of P3 bundle doesn’t work, shouldn’t you at least see if they are right?