Nova Scotia

Government opts for P3 funding to pay for new health-care facilities in CBRM

The Nova Scotia government says a public-private partnership provides the best deal for taxpayers when it comes to redeveloping some health-care facilities.

Facilities in New Waterford and North Sydney to be funded by private sector and leased back to the province

Lloyd Hines, Minister of Transportation and Infrastructure Renewal, says P3 funding for health-care redevelopment provides the best deal for taxpayers. (Craig Paisley/CBC)

The Nova Scotia government is going with private-sector funding for hospital redevelopment in New Waterford and North Sydney.

Last summer, the Liberal government announced plans to tear down hospitals in those communities.

The buildings will be replaced with new facilities, housing long-term care beds and community health centres.

Transportation and Infrastructure Renewal Minister Lloyd Hines said Thursday a private company will pay to build and maintain the new facilities and lease them to the province.

A public-private partnership — or P3 — model is the best deal for taxpayers, Hines said.

"The P3 process provides certainty for the owner in terms of derisking the operation," he said.

A private company will build the new facility set to replace the Northside General Hospital in North Sydney and then lease it back to the provincial government. (Tom Ayers/CBC)

"It sort of guarantees budget and time over process, and the analysis that we've done, extensive analysis over the past couple of years, tells us that there is a better-value-for money proposition."

Hines said the P3 model has been used successfully in building the Cobequid Pass highway, Halifax convention centre and several schools across the province.

The government is using the same P3 model chosen for the $2-billion redevelopment of aging buildings in the QEII hospital complex in Halifax to replace the New Waterford and North Sydney health-care facilities.

"We are following the same path that we're doing with the QEII rebuild and this is simply a re-enactment of that particular process," he said.

Nova Scotia government says P3 funding will be used to pay for a new health-care facility, with a community clinic and long-term care beds, to replace the New Waterford Consolidated Hospital. (NS Health Authority)

Unions and health-care critics immediately denounced the government's P3 plans.

NDP Leader Gary Burrill said the record shows P3 funding for public infrastructure is a mistake.

In a 2010 report, Nova Scotia auditor general Jacques Lapointe said the province could have saved $52 million over 20 years if it had financed the construction of schools, instead of using the P3 model.

"There's a stack of evidence about this, particularly from auditors general across the country, that has been very definitive and conclusive that this is not the way to go, that in the end it costs you more and it puts you in the situation where your province is not in control of your own health-care facilities," Burrill said.

The province has not yet provided a cost estimate of the work to be done in New Waterford and North Sydney.

NDP Leader Gary Burrill says provincial auditors general across the country have come out against P3 funding, saying it costs government more in the long run. (Craig Paisley/CBC)

A consultant is expected to be hired in the next few weeks to lead the P3 process and prepare for the tender process.

The work is part of a larger plan to redevelop all of the health-care facilities in Cape Breton Regional Municipality.

Hines said no decision has been made yet on whether a planned expansion at the Glace Bay hospital will be paid for directly by government or if that, too, will be financed using the private-sector model.

A new building to expand the Cape Breton Regional Hospital in Sydney is being built and paid for by the province at an estimated cost of $125 million.

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About the Author

Tom Ayers

Reporter/Editor

Tom Ayers has been a reporter and editor for 33 years. He has spent the last 15 years covering Cape Breton and Nova Scotia stories. You can reach him at tom.ayers@cbc.ca.

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