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CAN'T FIND SOMETHING? |
Business in Vancouver April 29-May 5, 2008; issue 966 Business big on public-private partnerships, BIV-Ipsos survey finds But concerns persist over P3 costs and the transparency of contracts hammered out between the government and the private sector Andrew Petrozzi Support for public-private partnerships is strong among B.C. business leaders, but contract transparency and doubts over P3 cost controls highlight areas for improvement, according to the latest BIV-Ipsos Reid survey. The survey revealed that 75% of respondents support the provincial government building and managing public infrastructure via P3s; 67% support federal and municipal governments using P3s. “The criticisms of P3s are fairly thin,” said Steve Mossop, president, western region, North America for Ipsos. “But there are two items that jumped out.” While respondents said P3s: •allow infrastructure to be built more quickly (80%); •encourage innovation (83%); and •create jobs for the private sector (84%); that agreement dropped markedly when respondents were asked if P3s: •are less expensive overall (51%); and •provide better infrastructure (50%). Approximately 55% of respondents said P3s are not transparent about procurement, funding and operations. “It’s a bit of a black box, and the rules of engagement aren’t very clear,” said Mossop. “That’s the Achilles heel of the entire thing.” He added that he was surprised by the response regarding P3 costs. “Often the number-1 positioning on both sides is that this is meant to be a financially lucrative deal,” he said. “Whereas business leaders are saying maybe that shouldn’t be number 1. It should be around innovation, job creation, better quality and a different way of doing business.” One-quarter of respondents said governments use P3s to avoid paying union wages; 48% said governments risk losing control over services provided by the private sector. But 64% said P3s improve overall service to the public because private companies are more service focused than governments. Just 30% said that P3s cost taxpayers more because governments can borrow money more cheaply than can the private sector. While 35% said that P3s tended to increase the overall cost to the public because of the need to pay for the private partner’s profit. Only 28% said that P3s were a way for government to shirk its responsibility to provide infrastructure. Overall, 49% of respondents said P3s cut public costs; 57% said they improved service. Transportation infrastructure was viewed as the most suitable P3 project (41%), followed by health care (15%) and new technology (13%). Educational and government buildings, sewage and water infrastructure and community centres all ranked in the single digits. “It relates to how understandable it is, and transportation jumps out as number 1, because it’s familiar and people have seen it in action,” said Mossop. “With things like health care or government buildings, it’s questionable as to whether the support is as strong.” Respondents’ comments showed an awareness and distinction made between P3s in building infrastructure or outsourcing services. Mossop said media coverage of failed P3s has increased skepticism about their terms and transparency. He added that government, contractors and bidders need to know what drives public support and opposition to P3s and focus on making them more understandable. Clarity will likely increase support. “Governments and industry need to do a better job of communicating the pros and cons [of P3s] and addressing the cons in an objective way.” • apetrozzi@biv.com |
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