P3 or not P3

The provincial government is paying Deloitte half a million dollars to recommend whether the Province should use some type of a public-private-partnership (P3) to finance, build, and maintain two new outpatient centres.

The outpatient centres will be part of the overall re-development of the QE2 Health Sciences Centre to replace services, 200 patient beds, and up to 15 operating rooms when the crumbling Victoria General (VG) and Centennial buildings are slated to close at the end of 2022.

The price tag for the first phase of the P3 study due in May — as well as the continued pursuit by the McNeil government of P3 as an option for any new building costing more than $100-million — was revealed during questioning of 10 top civil servants during the Legislature’s Public Accounts meeting yesterday. The Department of Transportation and Infrastructure Renewal (TIR), the Department of Health, the Nova Scotia Health Authority, and Internal Services (procurement) are part of a team approach to seize what NS Health Authority CEO Janet Knox described as “ a once in a generation opportunity to rebuild the way we deliver health care in Nova Scotia in way that better meets the needs of Nova Scotians.”

More on that later. It took several attempts by Pictou East Conservative MLA Tim Houston to worm out the cost of the Deloitte report from Gary Porter, TIR’s executive director of corporate initiatives. Porter told the committee Deloitte has been asked to provide the government with examples of hospitals built in other provinces, particularly Ontario, using a variety of P3 models. He said Deloitte will also carry out a “market sounding” to see if there would be any interest from the private sector in partnering with the province on the two new outpatient centres.  Expansions and renovations will be managed by TIR.

Deputy TIR Minister Paul LaFleche told the committee that the government had looked at and rejected P3 as a source of financing for the $138 million addition underway at the Dartmouth General Hospital to add beds and four new operating rooms “because the benefits were simply not there.” LaFleche noted that “there are a lot of misconceptions around P3 projects” and suggested the recently completed Nova Centre (a P3 project) shows the province “got what it wanted” for the approved budget, although admitting the schedule  “slipped” by more than two years.

Talk of P3 was a red flag for Sackville MLA Dave Wilson, a Public Accounts committee member and a former Health Minister in the Dexter NDP government.

“It’s clear there is a lot of money and effort being put in a P3 model for the future and I think with a project this big, ownership should remain public after any building  is built,” Wilson told reporters after the Committee meeting. “That’s what concerns us and we haven’t got any answers on whether that is going to be the case here in Nova Scotia with the re-development of the QE2. As soon as you go P3, it siphons money out of front line health care.”

Nearly two years after the McNeil government announced the VG hospital would be replaced — a facility where the most complex bone marrow and organ transplants take place is a leaky building with poor air quality and no potable water — civil servants responsible for the re-development were unable to provide a preliminary cost estimate for the work. That’s despite the fact the government has received a preliminary estimate from Kasian Architecture, the firm it hired to complete the “master plan” or blueprint that will drive what will be the largest construction project in Nova Scotia history.

Is it a billion dollars or two billion or more we are looking at as a Province?

“I think once we get the Kasian planning report approved by government and we know the full scope of the project, we will be in a position to give an estimate in the ballpark range but not dividing it into components such that bidders would know what we are expecting,”said deputy minister Paul LaFleche.

“The costing has been done as the plan has been developed,” added John O’Connor, TIR’s major projects director, “and we haven’t shared that costing and the plan with government yet so that’s why it is premature for us to give out a number today.”

In concert with people who work for the Health Authority and TIR,  the Kasian plan took a year to research and cost $1.9 million. The province received the 800-page document December 29^t, two months ago. Deputy Infrastructure Minister Paul LaFleche estimates it will be another month or two before staff have finished their review and it goes to cabinet, well after the spring session of the legislature has ended.

At some point, cabinet will decide whether to proceed with the QE2 redevelopment plan and  reject or accept the preliminary cost estimate, with the understanding the estimate will undoubtedly change after the design work is completed. Cabinet may or may not choose to release the cost estimate to the public; at this point there is no commitment to make it public.

“There is a lot of secrecy around he numbers”, observed Tim Houston, the PC Health Finance critic. “Some of it may be necessary and some not necessary. After this session of Public Accounts, I feel as if a whole bunch of people are digging, digging a hole for the foundation of a house but nobody knows what that house will look like or how much it is going to cost. We’re told ‘just trust us, it’s happening’.”

Given that the first draft of the Kasian report was received last July, the Halifax Examiner has filed a Freedom of Information application to see the final report submitted to the government in December.

The description of how and where surgeries and services will be delivered in the future at eight sites within the QE2 Health Centre is detailed in the still-secret Kasian report. However, Nova Scotia Health Authority vice-president Paula Bond and TIR’s Major Projects director John O’Connor are willing to share the broad strokes of what’s planned for the future. Here are few examples although by no means a complete list.

Preparation for chemotherapy at the VG will move to  the Dickson Centre; dialysis may move to a new outpatient centre to be built where the CBC building sits next to the Halifax Infirmary, purchased by the province. Cataract surgeries done at the VG today will be carried out at the Halifax Infirmary site and potentially at a community outpatient centre at Bayers Lake. Many orthopaedic surgeries will move to the Dartmouth General when new ORs open in a few years. Hernias and knee scopes have moved to the Hants Community hospital in Windsor. A new community outpatient centre to be built on land purchased in the Bayers Lake Industrial Park will offer X-rays, blood work, dialysis, drop-in appointments, and consultations with a broad range of specialists for patients who don’t want the hassle of driving into the city and paying to park. You can find more information here.

Complex transplant operations will move to the Halifax Infirmary — but not for several years after tenders have been let to build new operating suites and ICUs as part of the third and fifth floor expansions. “A domino effect” is how the Nova Scotia Health Authority’s Paula Bond describes the planning and scheduling process to overhaul the health system while CEO Janet Knox admits the present condition of the VG and Centennial buildings  “are a big worry for us.”

Meanwhile, it’s not clear whether any one government department or individual has overall responsibility for the multi-year redevelopment project. Deputy Minister Paul LaFleche joked he, Janet Knox, Denise Perret (deputy health minister), and Jeff Conrad (deputy minister of Internal Services) “will all lose our jobs if something goes wrong.” The government is banking on a team approach to get the VG replacement over the goal line and it’s clear a lot of work has been done in the past several years starting under the previous government.

What’s not clear to PC MLA Tim Houston is who, if anyone, is accountable.

“There’s potential for this project to go off the rails and the potential increases if there isn’t a single department or a person who will be held accountable for this,” said Houston.

A decision on the financing approach the government will choose to build the two new outpatient centres appears unlikely before this fall, at the earliest.