Few taxpayers believe that governments are efficient or good money managers. Recent debacles like the sponsorship scandal, the $2-billion gun registry or B.C.'s own fast ferries are expensive reminders of government incompetence and mismanagement.

It is perplexing, then, when the value of large scale government projects are ferociously defended on the grounds that the good or service in question is "too valuable" to be put in the hands of the private sector.

Either out of self-interest or political opportunism, public sector enthusiasts try to demonize the participation of the private sector in any public project.
Promises to "stem the tide of privatization" in health care or to keep the "public" in public services have become common political catchphrases that have no meaning other than to create fear and fetch the gratuitous applause of ideologues.

In Ontario, for example, Premier Dalton McGuinty made a campaign promise to halt public-private partnerships (P3s) such as a hospital planned in Ottawa. Once in government, however, McGuinty realized the savings of the P3 project were too great to forgo, so he made some changes, dropped the P3 designation and signed the deal. The P3 agreement includes a private sector consortium that will design, build, finance, and maintain the new building. The public-private partnership is estimated to save taxpayers $17 million.

Public-private partnerships are an effective means of cost containment for major public projects. Most P3s involve a competitive bidding process, a long-term contract between the private sector partner and the government, a fee schedule and quality-control measures.

The benefit is obvious: Taxpayers are protected from cost overruns. If a project budget unexpectedly increases or is not on schedule, it is the private sector partner that pays, not the taxpayer.

Here in British Columbia, the largest P3 project underway is a hospital in Abbotsford. Recently, Access Health Abbotsford was announced as the successful consortium for the project. While final contract negotiations are still ongoing, construction for the 300-bed medical facility is expected to begin this fall.

Access Health Abbotsford will finance, design, build, maintain and operate the hospital facility for 30 years. Services such as laundry and security will be provided and subject to quality control. If quality is unsatisfactory, the provider can be replaced and cost overruns will be absorbed by Access Health Abbotsford, not the taxpayer.

Once again, however, a P3 project is being used to win political points.

NDP MLA Joy MacPhail ominously threatened: "If this private hospital is allowed to go ahead in Abbotsford, Gordon Campbell will try to duplicate the scheme in every part of the province."

Partnering with the private sector to build and maintain a hospital does not mean the hospital is private. Besides, it wasn't that long ago that the NDP thought public-private partnerships were an excellent way to save taxpayers' money.
In 1999 while Jenny Kwan was minister, the Ministry of Municipal Affairs released a guide on P3s.

The guide notes that, "with public private partnerships ... government may be able to realize cost savings for both the construction of capital projects as well as the operation and maintenance of services. ... Private partners may be able to reduce the cost of operating or maintaining facilities by applying economies of scale, innovative technologies, more flexible procurement and compensation arrangements, or by reducing overhead."

This is a bad idea? Perhaps MacPhail should take a look at what Kwan was promoting a few years ago.

As health-care and infrastructure costs spiral out of control, it is crucial that governments look for alternative service delivery mechanisms to save money. Public-private partnerships are a proven method to contain costs and improve service.
Let's hope MacPhail was correct and the premier repeats the Abbotsford project across the province.