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Public-Private Partnerships may not be the bargain we have been led to believe.
#11
Why go through the partners for borrowing?
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#12
(12-13-2014, 11:22 AM)JoeKW Wrote: Why go through the partners for borrowing?

Because often the private party assumes all the risk, i.e. the loan is not government backed.
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#13
(12-13-2014, 11:22 AM)JoeKW Wrote: Why go through the partners for borrowing?

It's intentional. It means GrandLinq has more to lose if they don't deliver.

You can see the Region's full rationale here.
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#14
I find the AG report quite bad which is surprising since she has stellar credentials but the content reads like amateur hour. E.g. comparing private industry expertise with fictional in house expertise OR neglecting to mention that the extra cost of transfers risks to the private partner.
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#15
Actual P3 cost inflation has been greater than CPI in Ontario (by a large margin). Several P3 projects have had cost increases on Annual Service Payments (ASP) partially held back until this problem is mediated or resolved.
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#16
I still hold that PPP is neither inherently good or inherently bad. It's fundamentally an outsourced contract, and how well it works out depends on (1) who the private party is, and (2) how well the contract is negotiated. It's the exact same situation for a private corporation that chooses to outsource part of its operations.

If we don't have bureaucrats who are good at negotiating business contracts, then that's one thing that should be addressed urgently.
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#17
Empirical evidence in Ontario is that P3 costs more.

http://www.auditor.on.ca/en/reports_en/en14/305en14.pdf

You can hold all you want, those are the facts. To say it's because we have bureaucrats that aren't good at negotiating business contracts is neither here nor there. The fact its, P3 costs more. See Auditor General report.
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#18
The AG's report doesn't say P3 is evil, nor does it says that Infrastructure Ontario should stop using this approach.  And it says the on-time completion record of P3 (one of the key objectives for choosing P3 in many cases) is very good.

They do recommend negotiating better contracts in the future.  Which is exactly what I said.  For example, AG says:

Quote:Infrastructure Ontario should ensure that all proposed changes to its VFM assessment methodology, including its plan to increase the base cost on the public-sector comparator side by up to 13.3% to reflect value-added innovations that the private sector may be bringing to projects, can be and are fully supported and can sustain scrutiny.

So what's your recommendation?
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#19
Full disclosure of lifecycle payments and project costs so that an impartial assessment can be made.

I can say that at least 3 P3 partnerships in Ontario have resulted in increased operating costs. I am bound by NDAs to say no more than that. P3 partnerships, the way IO draws them up now, seems to reward private partners richly for only assuming part of the project risk.

It's a great gig. I've worked on the public side of a P3 deal, as well as the private side. The private side gets far more of the gravy.
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