CUPE fears cost to Winnipeg of P3 bridge
Last Updated: Tuesday, January 23, 2007 | 3:36 PM CT
CBC News
The Canadian Union of Public Employees wants the City of Winnipeg to rethink its plan to use a public-private partnership to rebuild the city's Disraeli Bridge when it votes on its capital spending budget Thursday.
Under a public-private partnership, known as P3, a private contractor builds, runs or maintains a capital project, and the city pays that company an annual fee.
It's like buying a bridge with a credit card, said Gary Swanson, president of CUPE Local 500.
"The excess is in the financing. In most P3s, if it's built by the private sector, they would be responsible for financing it. They cannot get the same type of financing the City of Winnipeg can.
"The City of Winnipeg has a double-A rating, which means we can borrow much cheaper than the private sector," Swanson said.
He said the private sector will recover those higher borrowing costs when it leases the bridge back to the city, through higher lease payments.
In the long run, he said, it would be cheaper for the city to do it on its own.
The budget proposes using public-private partnerships in more than $110 million worth of capital projects, including the construction of three new police stations.
The head of the Manitoba Heavy Construction Association, Chris Lorenc, insists the private sector can do the work faster and cheaper.
"Our business is bottom-line outcome results driven …. At the end of the day, [we must] have the outcome and results that keep us in the black. And that's the difference in thinking, respectfully, between public and private sector," Lorenc said.
He said most of the city's projects that were not public-private partnerships have gone over budget.
If the public sector were really good at infrastructure, he said, Winnipeg would not be facing a $100-billion bill to fix its old bridges, roads and sewers.
The city's capital budget, which was presented in council Friday afternoon, proposes spending nearly $425 million in 2007. That's more than double original estimates.
"This budget is bigger than it's ever been," said Old Kildonan Coun. Mike O'Shaughnessy, who chairs the city's finance standing committee, on Friday.
O'Shaughnessy said the budget aims to catch up on some long-overdue work.
"We've fallen further and further behind every year since 1972. This is the first year that we're minimally catching up," he said.
The city is taking advantage of upcoming cash infusions of hundreds of millions of dollars from the federal and provincial governments over the next six years.
