The private sector at the rescue?

For a government which attempts to reduce a record deficit of 13.6 billion. However, whose credit rating has just been lowered, the participation of the private sector in the construction of infrastructure is attractive.

Posted at 5:00 a.m.

By working with the private sector which provides the expertise. Therefore, financing and maintenance of built infrastructure, the public authorities can start and carry out projects that sleep in the boxes for lack of funding.

This is theory. Nevertheless, In practice, it’s different.

It is a bit as if the state. Consequently, which cannot afford more to buy a new private sector rescue? car, chose to rent one and spread payments over a period of several years. Furthermore, In the end, with interest, rental costs more than purchase.

In terms of the financial framework. For example, there is not really an economy for the government, explains Louis Lévesque, head of public policies at the Association of Economists of Quebec.

A PPP project will cost more than a 100 % public project, because the government can borrow from lower interest rates than the private sector to finance hospitals, schools or roads.

On the other hand, taxpayers win there private sector rescue? in the long term, according to him.

In a PPP, the partners agree by contract on the specifications of the project, on its cost and the duration of the work which is the responsibility of the private sector. The private sector takes the risk of execution and is monitored by its creditors. The government then pays a monthly. annual sum for a period generally varying from 30 to 35 years, at the end of which it becomes the owner of the work which must be in impeccable state during its restitution.

private sector rescue?

The private partner is responsible for maintaining the assets during this period. which is an incentive to emphasize the quality and sustainability of materials.

The advantages offered by expertise. discipline in the execution and obligation to maintain the assets of a PPP, “that is savings for the government,” summarizes the economist. But for the evaluation of his credit rating, it doesn’t change anything, he adds.

Private sector rescue?

L’abc des PPP

Hospitals. schools or roads, most infrastructure projects can be carried out in public-private partnership, estimates François Plourde, who led the Cima+Cima+engineering firm for eight years and which is now retired.

François Plourde participated in the very first PPP in the history of Quebec. the construction of the Bridge of Highway 25, which proved to be a success. “Maybe that’s why we never talk about it,” he laughs.

There have been other projects that went well, such as highway 30, the symphonic house and the boyfriend.

private sector rescue?

The Samuel-de Champlain bridge was made in PPP. It was built in four years and cost 4.4 billion. According to the federal government, the PPP formula has saved $ 1.7 billion, or 33.7 %, compared to what a 100 % public project would have cost.

According to François Plourde, there are projects that lend themselves better than others to PPP. “It must be new rather than repair. and the project has sufficient wingspan to justify the additional cost of legal contracts between the parties. »»

A PPP is not the ideal formula to build a single school. but a network of several schools would lend itself better, illustrates the engineer.

In all cases, the preparation of the project is the key to success, he underlines. “If it’s badly prepared, private sector rescue? it’s going to be a failure. »»

Striped vocabulary

Elsewhere in the world, everything is done in PPP, says Monique Jérôme-Forget, “except in Quebec”.

According to her, the word “private” is synonymous with “privatization” for unions, which mainly oppose PPP in all their forms.

When she was president of the Treasury Board in the government of Jean Charest. Monique Jérôme-Forget had set up the public-private partnership agency which lived four years from 2004 to 2009.

Since then. the PPP expression has disappeared completely from the government vocabulary, even if public-private partnerships have continued to carry out, such as the Symphonic House, a 266 million project announced in 2009 and inaugurated in 2011.

The Quebec infrastructure plan (PQI). which lists colossal investments that should be made in Quebec in the next 10 years, has no mention of public-private partnerships.

There are 164 billion dollars of projects deemed priority by the government for Infrastructure Plan, which continues to swell.

It was not possible to speak to the Minister responsible for infrastructure, Jonatan Julien. However, its office says that the government is private sector rescue? open “to collaborative production methods”.

Regardless of the expression used. subcontracting and PPPs will never have the favor of unions, according to Guillaume Bouvrette, president of the union of professionals of the Quebec government.

“In PPPs, the government takes all risks and the private company takes all profits,” he summarizes. Public-private subcontracting. partnerships contribute to the loss of expertise within the government apparatus, to the detriment of taxpayers, he believes.