Poor infrastructure needs private sector, says panel

Elizabeth Brubaker of Environment Probe put things plainly at the 18th Annual Canadian Council of Public Private Partnership (CCPPP) Conference in Toronto last week.

Brubaker simply let statistics show that “utilities are not performing well,” and that “municipalities face an impossibly high bill to turn things around.” Therefore, she said, her message was that upgrading infrastructure “should be a huge opportunity for the private sector.”

Speaking on a panel titled “Water, Water Everywhere, But Not a Drop to Drink,” Brubaker said that of 700 municipal water facilities in Ontario, the latest figures show that 198 had experienced water quality violations due to microbial problems, and 47 more had chemical violations. Over 300 had problems related to their operations, she said.

Sewage treatment systems are performing as badly, Brubaker said. She said over 109 sewage plants need upgrades in Ontario, and 900 are in that position across Canada.

Taking into account the costs to fix leakages in the systems, Brubaker said that the costs to fix the problems are estimated at $79 to $129 billion — and even that figure is low because it’s thought that systems will need another $13 billion to meet new federal regulations.

Grant programs are not enough to finance the necessary upgrades, she said, and municipalities don’t have the managerial or labour skills. Therefore, they will have to find alternative mechanisms which means involving the private sector.

Of course, Brubaker was preaching to the converted at this event. The CCPPP conference is devoted to promoting public-private partnerships of all kinds. Most of the speakers are already heavily involved in P3 projects, with a roster of VPs, chiefs and executives from across the board — governments, utilities, First Nations, law and financial firms, and construction and engineering companies.

The next speakers in line on the “Water, Water …” panel were Mark Sanderson of Veolia Water North America, part of the worldwide corporate giant, and Charlie Bagnato, mayor of Brockton, which includes the infamous town of Walkerton where thousands became ill and seven people died due to the contamination of the water supply in 2000. While at the time some blamed the privatization of testing labs as part of Walkerton’s problems, Bagnato only had praise for Veolia, the private company which has been operating a water supply system in the town for over four years. The P3 arrangement was benefiting  the town by $400,000 a year in savings, Bagnato said.

Next, Joe Gysel of EPCOR Utilities of Edmonton said there is still confusion about the value of P3 projects, but that municipalities can actually gain more control over their infrastructure with private partnerships as long as they negotiate a good contract with the private partner. Without private partners, municipalities don’t do full cost accounting, so they don’t know what the true costs are of what they build. When they receive funds, they often get “just enough to do the wrong thing instead of the right thing,” he said.

During the question and answer period, the panel discussed the opposition of unions and environmentalists to public private partnerships. Sanderson wondered why privatization is “constantly vilified.” He said he was “dumfounded” that environmentalists should be so upset over privatizing water when we live in a society that buys its drugs and its food from private corporations. “Why is it so diabolical to privatize water treatment?” he asked.

Brubaker suggested that a lot of misinformation was being spread about privatized water treatment plants, and in response private companies like Veolia and EPCOR should “take the gloves off.”  They should point out the problems with public utilities and be much more open and transparent about their own operations.  Transparency is a “huge issue” of concern over public-private contracts, she said.

Brubaker said that rather than a water crisis, “we have a water scandal” in that we have become so accustomed to having such terrible service, such as tolerating hundreds of boil water advisories, and beach closures.

Among the CCPPP awards handed out at the conference, a gold award for financing went to the New Glen Campus, McGill University Health Centre, in Montreal. SNC-Lavalin and Innisfree are the financing group for the project.

The gold award for infrastructure went to the Alberta Schools Alternative Procurement (ASPI) Infrastructure Phase in Calgary and Edmonton. The awards are called the National Awards for Innovation and Excellence in Public-Private Partnerships.