Long Term Care P3 Project Requires Transparency and Independent Oversight  

For Immediate Release:

Monday, January 23, 2017

ST. JOHN’S, NL– Last week’s announcement that the provincial government is moving forward with a Public Private Partnership (also referred to as a P3s) model for the design, construction, and maintenance of a new long-term care facility in Corner Brook raises a myriad of concerns and questions that need to be answered by the provincial government.

Public-private partnerships (P3s) involve commercial contracts between governments and private businesses in the design, construction, financing and, often times, the operation of public infrastructure and services that have traditionally been delivered by the public sector, such as hospitals or schools.

“We have been hearing rumours that the provincial government was doing work behind closed doors with EY to build the case for public-private partnerships for new facilities. Now, I guess we know that those rumours were true, but we found out about it on Friday like everyone else,” said NAPE President Jerry Earle. “It’s not a shock that EY is recommending a P3 model for this facility – they have a track record of being a champion for this style of project. EY has won awards from various P3 organizations for their efforts to drive this agenda and is a current sponsor member of The Canadian Council for Public-Private Partnerships. So, you have to wonder how sound their value for money analysis is? There is too much at stake to simply take EY’s word for it.”

“Projects like this have long-term financial implications for the province, so the public deserves an independent and transparent analysis of EY’s work on this project. Transparency and accountability must be at the forefront of all government decisions, especially for projects of this magnitude,” said Earle. “Research and real world experience in other jurisdictions highlight some serious flaws in how governments and their consultants tally the benefits of public-private partnerships versus conventional public projects. This has led to projects that have been massive failures across Canada and around the world. We must ensure that this project is not added to that list.”

The Ontario Auditor General recently released a damning report about the P3 projects in that province, saying that the project’s cost over $8 BILLION more than if they had been publicly financed and operated. A similar picture emerged in British Columbia when the Auditor General there said that a P3 project was completed on time, but the final cost was 29% ($28 million) higher. The list goes on and on.

“While we are pleased to hear that this P3 project will ensure that care is provided by the public system, we have a number of questions about the particulars of how the government envisions this arrangement working – What does “maintain” mean? How long will the lease be? What will the interest rate be? Who owns the facility at the end of the project? What safeguards will be in

place? These are but a few of the questions that the province needs to answer in the coming days,” said Earle. “A three-page, short on details, value for money assessment by EY and the assurances of the provincial government is not going to cut it. The risk is too high and the track record of P3s is too sketchy for us to run headlong into the arms of P3 projects without taking every precaution to ensure that taxpayers aren’t left holding the bag for projects that this government can take credit for in the short term.”

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For further information, please contact:

Keith Dunne, NAPE Campaigns and Communications Coordinator

(phone) 709.570.2501              (cell) 709.631.9737                (email)