“The auditor general has said today that governments pay a premium when they bring in private companies to build and maintain public infrastructure,” said Susan Leblanc, the NDP’s Transportation and Infrastructure critic. “Without the Public Accounts Committee or the Legislature meeting, the public doesn’t have access to the information necessary about whether this is a good deal for the province.”
The NDP MLA from Dartmouth North was responding to a portion of Auditor General Michael Pickup’s report that looked at the 2018 Deloitte report which recommended the government choose a P3 or Public-Private-Partnership model to finance and build new hospital and outpatient buildings at the Halifax Infirmary and Bayers Lake to replace the Victoria General Hospital.
“Under a P3 model, government pays a premium to a private sector partner to take on the risks of a project,” stated the AG’s report. “The value-for-money analysis included in the Business Case is based on a series of assumptions and risks for the Project. When bids are received from potential partners, it is important to use this information to validate the information used in the Business Case and refresh the value-for-money analysis to ensure that the Design-Build-Finance-Maintain model is still the best approach.”
“Across the country and here in Nova Scotia, we have seen P3 deals gone wrong,” said Leblanc. “Today’s report should have provided another opportunity to ask important questions of the minister of Transportation and Infrastructure and his department, however we are stuck outside Province House with no Public Accounts Committee meetings scheduled and no plan for when Premier McNeil is going to stop blocking public legislative proceedings.”
PC critic weighs in
“As the auditor general noted, the McNeil government is about to embark on a $2 billion dollar investment and have not conducted an affordability assessment, engaged in stakeholder engagement, or given thought into what the project looks like after construction is complete,” said PC Transportation and Infrastructure critic Tim Halman, Dartmouth East MLA. “In light of the COVID-19 pandemic, we’re also concerned about cost and time overruns associated. We expect the government to monitor this going forward. Our position has always been that taxpayer dollars must be protected and every health care dollar used to improve medical outcomes.”
The auditor general’s report recommends the project management team look at how COVID-19 may impact the P3 business case into the future. Christine Saulnier is the Nova Scotia director for the Canadian Centre for Policy Alternatives, a group which has been critical of government’s decision to contract out the provision and operation of healthcare services.
“The pandemic provides the government an opportunity to rethink,” said Saulnier, an NDP candidate in the last federal election. “I, as a Nova Scotia resident who has read all these P3 concerns voiced by various auditor generals and written a report on P3 schools, I think the pandemic is a wakeup call. It’s one that says we cannot lock into these 30-year maintenance contracts, given what we know about risks right now. I’m disappointed and I’m also a bit confounded the auditor completely accepts the methodology of PPP Canada, which no longer exists but was created to promote P3s.”
Saulnier mentioned a CCPA report issued last month on P3 projects in Saskatchewan. Maintenance workers in hospitals and schools interviewed for the report revealed problems. That report stated: “according to SaskBuilds, the partnership model allows private sector innovation and efficiency in all phases of the project…And yet our interviews with workers show the model to be wildly inefficient in certain respects, particularly in regards to day-to-day operation and maintenance. One worker explains: ‘when I first started, my typical area of cleaning was in the stairwells and back doors…but I was told that I clean the inside of the door, not the outside (that’s the P3 contractor’s job).”
Audit did not look at cancer centre move
Interestingly, Michael Pickup’s audit of the process used to choose a P3 model to build and maintain $2 billion worth of new health care infrastructure did not include the potential cost of a decision to move all cancer treatment from the Dickson Centre to the Halifax Infirmary site after a master plan had been developed by Kasian Architecture. That decision created a domino effect with respect to decisions around the siting of a permanent 900-space parkade — now supposed to be built at the corner of Bell Road formerly occupied by the CBC — as well as other facilities.
“Kasian is the lead on our master planning and developing our requirements that will be included in the RFP for the Halifax Infirmary expansion (P3 component),” said Deborah Bayer, communications officer for the Department of Transportation Infrastructure Renewal. “Kasian’s cost to date is about $38 million.”
Bayer said a large parkade (about 1,000 parking spaces) and power plant will now be located on the former CBC Building site and a smaller parkade (about 500 parking spaces) will be constructed to the north of the Museum of Natural History. This will be part of the design-build-finance-maintain component of the Infirmary expansion. The Outpatient Centre and Cancer Centre will now be co-located in one building to be built on the former site of the Urban Farm and the block facing Robie Street. Here’s is the link to the revised concept site plan for the Halifax Infirmary expansion.
Pickup said only by ensuring private sector partners fulfill their contractual obligations will the benefits of the P3 model be realized and this will require additional work.
“The Auditor General is recommending Management leaders develop a project implementation plan in response to our recommendation to implement a contract management process to oversee the Halifax Infirmary Expansion and the Community Outpatient Centre projects. This implementation plan outlines project management and oversight controls for the Project up to the completion of construction of the facilities. Management also indicated another plan will be developed that outlines a contract administration framework to manage the contracts with private sector partners to maintain the facilities once construction is completed.”