FLAWED FAILED ABANDONED – 100 p3s - Canadian and International Evidence

Natalie Mehra, Ontario Health Coalition, 2005

PUBLIC PRIVATE PARTNERSHIPS (P3s) are spreading across Canada. Yet the
international and domestic evidence shows that the claims of P3 proponents
deserve close and careful scrutiny. This report gives a brief overview of 100
projects from Canada and abroad. While P3 proponents claim that projects
come in “on time” and “in budget”, the evidence does not bear out these
assertions. Many projects are late and serious cost overruns are frequent. The
bifurcation of management or ownership of public services entailed in these
deals leads to serious conflicts of interest between corporations that seek to
maximize profits and public services that seek to meet community needs and
contain budgets, leading to costly legal disputes and quality issues. Moreover,
in the negotiation of P3 deals, the public sector has not been able to achieve P3
proponents’ claims of value for money or risk transfer.

This report does not tell the whole story. P3s have also increased inequality,
boosting salaries for executives and remuneration for expensive consultants
and lawyers while decreasing pay and working conditions and reducing access
to services. Democratic control has been sacrificed to commercial secrecy and
private for-profit management. High costs have led to service cuts and
diminished access. Long term commitment of large revenue streams to lease
deals has an unmeasured impact on government flexibility and public policy
decision making. All of these issues and more deserve closer study, but are
beyond the scope of this report.

It is our hope that governments considering P3s will take the time to critically
assess the claims put forward by the P3 lobby. At stake are billions of dollars in
public money and democratic control of our public services.
Our research yields several critical themes and trends that governments
considering P3 developments would do well to consider.