P3 option creating a lot of discussion for Regina waste water treatment plant

REGINA — The debate is about to heat up with a September 25 referendum on Regina’s new waste water treatment plant on the horizon.

Leonard Gilroy works for Reason Foundation, a think tank that has studies public-private partnerships (P3’s), which is the method the city favours to pay for the facility. If that happens, a private company will build and maintain the facility.

“Like any tool, public private partnerships can be used well, or they could be used poorly,” he said while in Regina to speak with a group looking for more information on P3’s.

When they are used well, Gilroy explains the benefits can be huge.

“Looking at the risks that can be transferred to a private operator that otherwise governments and taxpayers might bear, costs and schedules are one of those,” he said.

Gilroy, however, said P3’s can go wrong, too.

“The other key is getting the contracts structured right,” he explained. “And having contracts that are designed well and that hold the private sector accountable for delivering what they have promised.”

For Regina Water Watch, which does not want to use P3’s, that is just one concern. The others include entering into a deal with the private sector as well as the final cost.

“We’re saying it’s much cheaper to do it publicly simply because the city can borrow more money cheaper than any private corporation,” said Regina Water Watch’s spokesperson Jim Holmes. “What are we paying on financing costs? How much more is it going to cost us? And we’re saying a lot more over the 30 year period and when you’re making a big purchase that’s what you want to look at.”

Despite concerns by Regina Water Watch, a recent study by the Conference Board of Canada suggests P3’s are paying off, with a good track record over the last three years.

“Over that period we’re looking at 42 projects and 35 of those were completed on time or early,” said the study’s author Vijay Gill.

He says, however, the key to going with a P3 is deciding if transferring the risk to the private sector is worth it when factoring in costs like interest rates.

“There are additional costs involved so when you’re doing your analysis you have to make sure the benefits you’re expecting from the P3 exceed those costs,” Gill said.

With both sides claiming their way is cheaper, many Reginans are still unsure how they will vote.

Mayor Michael Fougere and Holmes will participate in a debate on September 19th held by the Gyro Club. It is open to members and their families. The public can attend if there is space.