P3 model has many flaws, risks

Reagan Seidler’s letter (Feb. 3) on the benefits of P3s contains a number of errors that need to be addressed.

While Seidler is correct that “private contractors always build things for government,” that is not the essence of the P3 model.

Traditional contracts always used private contractors for public builds. The P3 adds private financing (always more costly than government borrowing) and decades-long maintenance contracts that in the case of the North Battleford hospital will cost $6 million per year for what is effectively a brand-new building.

Certainly, Ernst & Young claims the P3 model saves money, but only if you believe the value-for-money reports these consultancies churn out to justify the P3 model.

Provincial auditors across the country (including our own) have regularly criticized these assessments for shoddy methodologies that end up vastly inflating the costs and risks inherent in the traditional public build model. The U.K.’s auditor-general Jeremy Coleman has dismissed value for money calculations as “utter rubbish” and “pseudoscientific mumbo-jumbo.”

Lastly, rather than showing the value of P3s, the bankruptcy of Carillion demonstrates their inherent risk. As Carillion teetered toward financial ruin, P3 consultancies continued to give it a clean bill of health and governments continued to award it contracts. That the P3 model couldn’t identify such a massive risk — the purported strength of the P3 model — demonstrates its utter bankruptcy as public policy.

Simon Enoch, PhD, director, Saskatchewan office, Canadian Centre for Policy Alternatives, Regina