Last month’s announcement that Nova Scotia will be paying another $12.9 million for two schools built through P3 privatization schemes is likely to just be the start.
Ottawa (8 August 2016) — Last month’s announcement that Nova Scotia will be paying another $12.9 million for two schools built through P3 privatization schemes is likely to just be the start. As the leases on P3 privatization schools end, Nova Scotians face hundreds of millions in additional costs.
Even though the P3 privatization scheme leases have already cost several hundred million dollars, the province will have to pay at least $206 million more if it wants to own the schools. That would push the total cost of the P3 schools to over $1 billion.
To make matters worse, purchasing the schools appears to be the cheapest option. The provincial government estimated that extending the P3 leases would cost $20 million more than purchasing the schools.
P3 schools plagued with problems
Successive Auditor General’s reports have criticized the P3 schools project for a wide range of problems:
- No credible evidence was provided that using P3 privatization schemes would save money, so the Auditor General was forced to conclude that the decision to use P3s was an attempt hide debt.
- No resources were allocated to monitor construction or operation of P3 schools.
- Health and safety violations by the P3 contractors including inadequate cleaning and failure to do child abuse registry or criminal records checks for staff.
- P3 contractors failed to transfer funds owed to school boards.
- School boards had to do work that was supposed to be done by P3 contractors – but the P3 contractors were still allowed to make a profit.
Nova Scotia government looking at using P3 privatization schemes again
Problems with the schools P3 privatization scheme were serious enough to convince all parties not to use them again, but that is changing.
The current provincial government is looking at using P3s for a new hospital in Halifax and twinning highways. It’s even refused to rule out extending the leases for some of the remaining P3 schools.
After the experience with the schools P3 privatization scheme, it’s unlikely that the provincial Liberals actually believe P3s will save money. But they know that P3s will allow them announce new infrastructure projects before the next election and delay the bills until after. That’s good news for Liberal campaign strategists, but not for Nova Scotia residents who will face higher costs and poorer service.
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