January 27, 2003

Abbotsford P3 Experiment

The Campbell government has issued an invitation for "expressions of interest" (EOI) for a public-private partnership (P3) in financing, designing, developing, constructing, equipping, operating, providing non-clinical services, and maintaining a new Abbotsford Hospital and Cancer Centre (AHCC). The Abbotsford project will be the second major health facility to experiment with the P3 idea; the first was the October 19, 2002, announcement for a $90 million Ambulatory Care Centre to be built on the Vancouver General Hospital site.

The government's news release quotes Finance Minister, Gary Collins, saying "P3s are a way that we can deliver improved publicly funded and accessible services, while ensuring the best value for taxpayers' dollars." The question in many minds is whether Collins has it right or whether the credibility of the claim ranks along side his failed assertion that tax cuts pay for themselves.

Until the invitation to express interest in the Abbotsford project closes on March 31, 2003, anyone can download the detailed 96 page document from the BC Bid website. It repeats Collin's optimism by saying:

Objective observers would say that the experiment with P3s will have to be assessed by the Auditor General in order to determine whether they prove to be "the best overall value".

The recent announcement provided no new information on how the first project is proceeding. How many companies responded to the invitation with respect to the Ambulatory Care Centre? How close is the government to signing a contract on that Centre, and when will construction start? Has the first project encountered any difficulties that will be avoided when entering into a contract for the Abbotsford project? Government's failure to report on the first project creates suspicions since they would be unlikely to miss an opportunity to boast if all was well.

A fee of $250 is required in order to receive a copy of any further information relevant to bidding on the Abbotsford project and to attend an information meeting. An open government might provide any further information to the public via a website, but the Campbell government has not only closed the information meeting but it has also included warnings in the bid document about the use of the Freedom of Information and Protection of Privacy Act. The invitation to express interest cautions that all documents in the possession of various public bodies MAY be subject to the Act. It goes on to say "Subject to the limitations of the Freedom of Information and Protection of Privacy Act, all EOIs and all other documents and other records submitted by a Respondent in connection with the REOI will be considered confidential." Finally, it warns that any attempt by a respondent to use freedom of information to gain access to the submission by any other bidder may terminate the respondent's participation. That may be fair enough, but it is not reasonable to exclude the media, and thereby the public, from close examination of the great experiment in public finance.

Experience in the UK has shown great difficulties with P3s. In particular, when the private partner goes bankrupt or wants out of the deal, the public partner ends up holding the bag. That is one of many reasons why BC's Auditor General may require the government to account for its P3s in the same manner as if government were directly borrowing the money. The Abbotsford Hospital and Cancer Centre will not open until 2007, long after the next election. The Auditor will have to consider the accounting treatment for the project the moment a contract is signed, long before the next election.