Ontario squanders extra $8 Billion on public private partnership infrastructure: A-G
Read this Dec. 9 story from The Globe and Mail on a new report from Ontario Auditor-General Bonnie Lysyk suggesting that public private partnerships are far more costly to taxpayers than publicly-funded infrastructure projects.
Public-private partnerships have cost Ontario taxpayers nearly $8-billion more on infrastructure over the past nine years than if the government had successfully built the projects itself.
The revelation, from Auditor-General Bonnie Lysyk, comes as Premier Kathleen Wynne stakes the province’s future on a vast construction program that will see dozens of new schools, bridges and subways built over the next decade. And it suggests Ms. Wynne can build that infrastructure more cheaply as she wrestles down a $12.5-billion deficit.
“If the public sector could manage projects successfully, on time and on budget, there is taxpayer money to be saved,” Ms. Lysyk said Tuesday at Queen’s Park.
Her audit looked at 74 projects – including several hospitals and the Eglinton light rail line – that were built using private partnerships, called Alternative Financing and Procurement (AFP), by Crown corporation Infrastructure Ontario since 2005.
Ms. Lysyk found that the province assumes there is less risk of cost overruns and other problems with AFPs than with the public sector. But she said the province actually has “no empirical data” to back up that assumption. Private partnerships, meanwhile, are more expensive because companies pay about 14 times what the government does for financing, and receive a premium from taxpayers in exchange for taking on the project.
In some cases, she said, the least expensive solution may simply be for government to get better at building infrastructure itself, rather than farming it out.
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