Nova Scotia

Province reverses course on public-private partnerships for 2 Cape Breton hospitals

The Nova Scotia government has quietly reversed its decision to use public-private partnerships to build new health-care facilities in New Waterford and North Sydney.

Minister says province will now directly fund hospital redevelopment in New Waterford, North Sydney

In April, Transportation Minister Lloyd Hines said a public-private partnership model would be used in the redevelopment of two Cape Breton hospitals, but this week, the deputy minister told a panel the government had changed its mind. (Craig Paisley/CBC)

The Nova Scotia government has quietly reversed its decision to use a public-private partnership to build new health-care facilities in Cape Breton.

In April, Transportation and Infrastructure Renewal Minister Lloyd Hines said the model would be used in hospital redevelopments in New Waterford and North Sydney.

However, this week, deputy minister Paul LaFleche told a panel discussion on public-private partnerships at Dalhousie University that the government had changed its mind.

At the legislature on Thursday, Hines told reporters he had no regrets about his decision in the spring.

Back then, Hines said a public-private partnership would provide the best deal for taxpayers.

"Based on the information that we had at the time, that's what we believed, but you know, it's a changing landscape," he said Thursday.

The province plans to tear down community hospitals in New Waterford and North Sydney and replace them with facilities housing long-term care beds and community health centres. (Tom Ayers/CBC)

Under this model, a private company builds infrastructure and the government leases it back.

Hines said the province will now go with a conventional design-build model, in which government finances infrastructure on its own and hires someone to do the work.

He said after review, government and private consultants determined that the department had its hands full with public-private partnerships to rebuild the Queen Elizabeth II Health Sciences Centre in Halifax and to twin Highway 104 near Barneys River, Pictou County.

"We have a lot of resources tied up in the [public-private partnerships] projects that we have currently underway, so to some degree it's a matter of capacity, but the New Waterford and North Sydney facilities, it was decided that we would be able to deliver quicker with a conventional model there," Hines said.

The province plans to tear down community hospitals in New Waterford and North Sydney and will replace them with facilities housing long-term care beds and community health centres.

The larger plan includes expanding the community hospital in Glace Bay and adding to the regional hospital in Sydney.

The province has already said it will fund the Sydney expansion, but it hasn't decided which funding model will be used in Glace Bay.

Nova Scotia government staff are preparing a request for proposals for design of the redevelopment project in North Sydney this month and an RFP for New Waterford is expected early in the new year. (Tom Ayers/CBC)

In the spring, the New Democratic Party, unions and health-care critics loudly opposed the public-private partnership model, saying it would be a costly mistake.

Hines said political opposition didn't play a part in the government's reversal on the funding model, and he wasn't aware of any potential cost savings by using a conventional funding model.

He couldn't say when the decision to scrap the public-private partnership model in Cape Breton was made and defended the government's decision to not issue a press release on the reversal.

"It wasn't felt that this was a significant change as far as the end result goes, except that we felt that we would be able to get there a little bit quicker," Hines said.

RFPs expected shortly

Marla MacInnis, who speaks for the department, later said in an email that government staff are preparing a request for proposals for the North Sydney design, which is expected to be released later this month.

The RFP for New Waterford will be issued early in the new year, she said.

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With files from Jean Laroche

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