Accountability railroaded by Ottawa privatization scheme | National Union of Public and General Employees

Accountability railroaded by Ottawa privatization scheme

It’s a measure of how much secrecy surrounds P3 privatization schemes that councillors weren’t even allowed to know if the companies being awarded contracts had met the minimum technical requirements.

Ottawa (08 March 2019) — The need for public services to be accountable to the public took a back seat to "commercial confidentiality" when Ottawa city council approved 2 P3 privatization schemes to extend rail lines.

Even though there are significant problems with a P3 privatization scheme for the city’s first light rail line, city councillors were told they didn’t even need to know if bidders met technical requirements. The 2 P3 privatization schemes will cost at least $4.7 billion, and councillors have had very little time to delay the project. Councillors with unanswered questions were told that even delaying the decision by 2 weeks wasn’t possible.

Ottawa P3 privatization scheme late and over budget

Ottawa’s light rail P3 privatization scheme illustrates the gap between what the privatization industry says about P3s and how they work in practice. When the privatization industry talks about P3s, the phrase “on time and on budget” is endlessly repeated. But like the P3 in Ottawa, in practice, that’s not guaranteed.

The Ottawa LRT project is almost a year late and people still aren’t sure when the LRT will open. Because the project is late, the city is facing additional costs. Contrary to privatization industry claims about how risk is transferred to the private sector provider, the City of Ottawa is paying most of the costs associated with the delays in the light rail line.

To add insult to injury, the secrecy surrounding P3 privatization schemes means that neither the public nor city staff can be sure about the information they are getting from the consortium building the route.

SNC-Lavalin, largest company in consortium responsible for delays gets another P3 contract

For the privatization industry, the term “consequences” have a different meaning than it does for most people. SNC-Lavalin is the largest company in the consortium that is responsible for the LRT privatization scheme that is late and costing more than promised. One might expect the problems with the current LRT P3 would interfere with the company’s attempt to get one of the 2 new P3 contracts. Instead, the company is being given one of the new P3 contracts which will be worth $799.3 million.

Information on whether companies met minimum technical score withheld

It’s a measure of how much secrecy surrounds P3 privatization schemes that councillors weren’t even allowed to know if the companies being awarded contracts had met the minimum technical requirements. Without that key information, it was almost impossible to challenge the decision to award SNC-Lavalin one of the contracts for a P3 privatization scheme.

Adding to the concern is that some of those advising council are from firms that profit from privatization. An example is that the lawyer telling councillors that they could not see the technical scores for companies bidding for the P3 is from Norton Rose Fulbright, a company that’s been involved in a lot of P3 privatization schemes. In fact, Norton Rose Fulbright has even done work for SNC-Lavalin on some of its other P3 privatization schemes.

Secrecy and lack of accountability bad for public

A major expansion of rapid transit should be good news for a city. In addition to reducing commuting times, improving transit is needed to reduce greenhouse gas emissions. But the secrecy and lack of accountability accompanying privatization mean that using a P3 privatization scheme will leave people worried about what they aren't allowed to know.

Time after time, the secrecy and lack of accountability accompanying privatization have affected the quality of service that people receive. An increasing number of auditor generals' reports are showing it means higher costs. And as the recent scandals around SNC-Lavalin have shown, there is a danger of corruption.


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE

 

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