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Port Mann Bridge -- Convention Centre All Over Again?

March 08, 2009
Port Mann Bridge -- Convention Centre All Over Again?

Without a doubt, the Port Mann Bridge is the worst traffic choke point in the Lower Mainland. It routinely delays commuters and truckers, ultimately hurting productivity. Unfortunately for taxpayers, the solution to the problem, known as the “Port Mann Bridge project,” is already creating visions of another Convention Centre calamity, the most recent icon of government mismanagement. (Photo: courtesy wikipedia.org)

If government were a private business, it would have been forced out of the construction game a long time ago. 

The Port Mann Bridge was supposed to be a Public-Private Partnership (P3), as was the Vancouver Convention Centre expansion. In both cases, the risk, financial or otherwise, was too great for a private sector company to take on. For Olympian reasons, the government forged ahead with the Convention Centre. That was a mistake. 

The original budget for the convention centre, $495 million, was not based on cost, it was based on the funding available from various levels of government. Once the government had a basic design done, the cost went up, and up, and up. True, construction cost inflation was much higher than expected, but project scope changes -- $33 million to expand public amenities, redesign the roof, and put retail space on the building's exterior -- significantly increased the cost as well. Even now, the $883 million budget is not guaranteed because the tab for any additional scope changes will be picked up by the taxpayer. 

The Port Mann Bridge project is already experiencing scope creep. 

Originally, the government said the cost of improvements to the Port Mann would be $600 million. That ballooned to $1.5 billion in 2006 when the government announced it would twin the bridge. Now, the total cost of the project is expected to be $3.3 billion. 

As we embark on what may be yet another boondoggle, we should stop for a moment and ask why almost every government subjects taxpayers to their very own Fast Ferry Fiasco. 

When the government built the Coquihalla Highway, it decided to “fast track” it to have it open for Expo ’86. The original $250 million cost ballooned to almost $1 billion. The massive cost overrun resulted in an inquiry that said the government’s attitude toward the public and the legislature bordered on contempt. 

Governments seem to get away with wasting tax dollars on project after project because we remember the benefits, but forget the costs. We know about the highway into the interior of the province, but forget how its massive cost overrun created massive outrage at the time and added to the provincial debt. Taxpayers now pay about $6 million dollars per day in interest on the debt our benevolent governments have built up over the years, in part by building overpriced infrastructure. 

Also, conventional wisdom says government must build bridges because they are public goods; no private sector company would because they don't make money. But that isn't true. 

The Guinness Family financed the Lion's Gate Bridge so people could access its new real estate development on the North Shore. The bridge opened in 1938 and had a toll of 25 cents. So, it's not that the private sector won't build a bridge -- it will -- but only if there is an economic reason for it. That's the difference between government spending other people's money to build a bridge, and the private sector spending its own money to build the bridge. The difference is between politics and economics. 

If a private company had even half the debacles various B.C. governments have had over the years, it would have gone bankrupt long ago. That's because governments that make mistakes just take more of other peoples' money. If the private sector is unable or unwilling to take on a project, it is a signal that the project is too risky for the taxpayer as well. Increasing the construction budget to cover off increased costs is something only a government would do -- after all, it's not their money. In the years to come, as the financing fiascos of the Fast Ferries, the Olympic Athlete's Village, the Convention Centre, and the Port Mann Bridge flow down the memory hole, our prosperity won't be far behind. It's time for government to get out of the infrastructure business.

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