The head of one of Canada’s biggest unions is worried the city is throwing caution to the wind for the sake of a some uncertain federal dollars.
Canadian Union of Public Employees (CUPE) national president, Paul Moist, was in Regina Tuesday for meetings. He also spoke to the media about the union’s concern for a public-private partnership (P3) proposed by the city that would see a private-sector company construct and operate a new $224 million waste water treatment plant for 30 years.
The city likes the model because it believes the federal government’s Public Private Partnership Canada arm may fund as much as 25 per cent of the project if they use a P3.
Its in-house analysis suggests the city will get the best value-for-dollar if the maintenance of the facility and the operations of the plant are also looked after by the private company for 30 years, which is the span of time it would take the city to pay back the money the builder would put up for the construction.
Moist has urged caution on the P3 front in Regina before, most recently at the last National Infrastructure Summit in 2012. During an interview Tuesday he spoke at length about the experience Hamilton, Ontario had after privatizing waste water in the mid-90s. He said that resulted in 10 years of contamination and the early termination of the company’s contract.
“When raw sewage was making its way into Hamilton Harbour in violation of all provincial and federal codes the city brought the operations back in-house because of citizen outrage,” he insisted.
That was the main concern, but he notes the day-to-day operations were inconsistent; a third of the staff was laid off almost immediately after the company took over, and the company changed hands three times over that decade.
“Most citizens want accountability in who operates things like water and they want that to stay in the public realm,” he said, worrying that the city’s ability to levy sanctions or penalties against the company could be limited.
Moist also feels the city could be pushing harder to get federal money. He notes that’s what was done in Abbotsford, BC in late 2011 when that city held a plebiscite on a similar P3 model that would have seen a private company take over operations for 30 years.
The federal government had insisted that it would only provide funding if a P3 was used.
“(Taxpayers) rejected $66 million in federal support because it was a compulsory P3 and they defeated a two-term mayor over the issue of wanting water and its operation to stay in the public realm.”
Moist’s concerns also extend to a perceived lack of transparency on the proposal.
He doesn’t understand why the city isn’t making its cost/benefit analyses and other documentation available to the public if the P3 is really the best option for the city.
He also calls the affordability of the plan into question, noting that a private company will almost certainly charge a much higher interest rate than the city would normally pay if it was borrowing from the province, as it is for its stadium P3.
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