Public-Private-Partnership doubles cost of new hospital | National Union of Public and General Employees

Public-Private-Partnership doubles cost of new hospital

Using a P3 will cost the Québec public at least $1 billion more than if the hospital had been built using traditional procurement. 

Montréal (19 Dec. 2013) - A recent report revealed that using a Public-Private-Partnership (P3) to build the University of Montreal Hospital Research Centre doubled the cost of the project.

According to the report, using a P3 will cost the Québec public at least $1 billion more than if the hospital had been built using traditional procurement. It was also made clear that $1 billion is the minimum cost increase from using a P3. It is likely that the increased costs due to using a P3 will be much higher.

Unrealistically high estimates used to justify P3

The report was completed by Professor Pierre J. Hamel with the Université de Montréal, Institut national de la recherche scientifique.

Professor Hamel found that Infrastructure Québec made the P3 option appear cheaper by using an unrealistically high estimate for government borrowing costs. The estimate used was far higher than what governments currently pay or have paid in the recent past.

Not the first report of problems with P3s in the province

This report follows two reports from Québec's auditor general that found Infrastructure Québec made mistakes when calculating whether or not it would be cheaper to use a P3 for the University of Montreal Hospital Research Centre and McGill University Hospital.

This is not the first serious problem to emerge with P3s for new hospitals in Montreal. The P3 for the McGill University Hospital, which was commissioned at the same time as the University of Montreal Hospital Research Centre P3 has resulted in charges of fraud and tax evasion.

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