New Brunswick

P3 water deal could save 'millions,' consultant says

Consultants hired by the city of Saint John say the municipality should enlist a private partner to build and operate a new water treatment plant.

PricewaterhouseCoopers pitches public-private deal to overhaul Saint John's water system

Saint John could save millions of dollars by enlisting a private partner to build and operate a new water treatment plant, according to PricewaterhouseCoopers.

The city hired the international consulting firm to examine its options surrounding a new water treatment facility.

Johanne Mullen, a representative from PricewaterhouseCoopers, spoke before Saint John councillors at a public presentation on Monday night.

She said a public-private partnership would make the most sense to fund an overhaul of the city's antiquated water system.

"The P3 would be less expensive than the traditional procurement model by approximately $3.2-million," she said.

The PricewaterhouseCoopers report says the city would buy itself a great deal of security under a P3 model, because Saint John administrators would get the comfort of knowing exactly what the price would be and how long construction would take.

It also suggests the system could be operating sooner, and the city would be more likely to get funding from the federal and provincial governments.

Mayor Mel Norton said when that is factored in, "there is a savings in excess of $85-million."

The water plant itself and some accompanying infrastructure was projected to cost $220-million. The report projects water rates to climb to a minimum of $1,450 by 2030, as well.

There is also an expense associated with operating a new facility for the next 30 years.

Information on exactly how much council expects the upgrades to cost was redacted.

Norton defended the decision to withhold the estimated figures. He said that information could impact the tendering process.

"A bidder who might be interested in working on the project in the future would simply look at what we're anticipating it would cost, and bid that exact amount — rather than what we hope could happen through this process, which is getting bids even lower than what we project," he said.

Council sets deadline

Coun. Shirley McAlary said she wanted to know if money spent on a P3 system would help local businesses.

"We're probably going to get companies that are not from our local area, because they have to put up a lot of financing," McAlary said.

"The big concern there is they will bring people in to do the jobs, and take the money out of the city.

"If we go with the P3, 50 per cent of it comes from the taxpayers of the city and it would be nice to be able to say we're putting money in the local economy, and that means jobs, which we need."

Mullen said such a partnership would lead to "significant local jobs."

"What we have observed … is that international players rely heavily on local resources," she said.

"They will need to team locally because they will need folks who understand the permitting, and the licensing and all the local requirements"

There has been broad political support for upgrading the Saint John system for several years and the idea of a public-private partnership has been raised consistently.

The city’s existing water-treatment system meets all regulations but it is an aging system.

Council plans to vote next week on whether to make a formal pitch for a public-private partnership for water. It has set a deadline of April 5 to submit its application to P3 Canada should it choose to go the private route.