There is a lot of debate surrounding the method for funding and maintaining a much needed highway improvement project in eastern Nova Scotia.
Recent statistics provided by the Canadian Centre for Policy Alternatives (CCPA) assert that using a Public Private Partnership (P3) funding model for the twinning of Highway 104 to Antigonish could result in $119.2 million in unnecessary additional costs, including $66.6 million more in interest payments, rather than using government bonds.
A report called “Highway Robbery: Public Private Partnerships and Nova Scotia Highways” said the construction costs of $285 million under the P3 model are $52.6 million more than what the government currently pays for constructing identical lengths of twinned highway.
On June 4, Canadian Union of Public Employees Local 1867 and the Nova Scotia Highway Workers’ Union hosted a town hall in Antigonish which claimed that the province is trying to “hand over ownership and operation of the new stretch of highway to a private, for-profit corporation,” which will cost 67 per cent more than the public option and provide poorer contracted-out winter maintenance.
The organizers of the town hall questioned why twinning of Highway 104 is the only current expansion project using the P3 model.
A highway twinning study by CBCL in 2016 examined the proposed twinning of the section from Sutherland’s River and Antigonish and it was calculated the proposed per kilometer cost – including construction and the purchase of land and water rights – was $6,125,291 for a total cost of $232.4 million.
To “sweeten the pot” for the successful contractor to undertake the project, the public sector unions indicated the company chosen by tender is going to receive an extra 26 kilometers of road that is already being maintained by public workers.
Seizing on these numbers, Nova Scotia’s New Democratic Party agreed that using the P3 model is the wrong decision. Pointing to the “Highway Robbery” report, the NDP said this is a bad deal undermining good jobs in a part of the province that needs them.
The NDP said P3 projects “take control out of the hands of the government which is footing the bill and cost more than traditional builds in the long run.”
Like other projects under the McNeil government, the NDP said the lack of transparency has been frustrating, pointing to Liberal members of the Public Accounts Committee attempting to block the P3 issue from coming before the committee. The NDP said this demonstrates that the government doesn’t want Nova Scotians to see how much they are subsidizing the profits of private companies to build public infrastructure with public money.
The NDP said the public deserves to know why the Liberal government is going down a route that has failed Nova Scotians before, pointing out that Nova Scotia taxpayers are still paying millions of dollars for P3 schools the Liberals built 20 years ago, while the P3 Cobequid Pass project cost $232 million more as a P3 project than it would have as a public build.
Just before Prime Minister Justin Trudeau announced a federal government investment of $90 million to twin the 38-kilometre section of Highway 104 between Sutherland’s River and Antigonish last summer, the province unveiled its P3 plans to the public.
In April, 2018 Transportation and Infrastructure Renewal Minister Lloyd Hines said the province was investigating the use of a “Design Build Finance Operate Maintain” model in which the responsibilities for designing, building, financing, operating, and maintaining the highway is given to a single firm through a bidding process, allowing one firm to control the schedule of the project. The province would then pay the firm annual service payments for the operation and maintenance of the highway for the duration of an agreement.
The project will twin 38 kilometres between Pictou County and Antigonish, along with the construction of new interchanges and bridges.
Hines said if the department plans to hit their target of completing the project by 2024, they need to find a way to speed up the process, and the Design Build Finance Operate Maintain paradigm will save time and could save the province 14.5 per cent of the total budget. Hines said that can be achieved through bulk purchasing and consolidated management.
Not just saving money and time, Hines pointed to public safety as the main reason for twinning.
During last summer’s announcement, the Prime Minister said the work on Highway 104 will relieve the traffic bottleneck and deal with the numerous fatal and serious collisions, with Trudeau claiming the twinning is expected to reduce fatalities by 80 per cent.
Between 2009 and last summer, there were 414 accidents and 16 people died on that stretch of road, including several Strait area residents.
Construction is anticipated to begin in early 2020, with the much-promised upgraded section of Highway 104 twinned by 2024.
But according to the province, without the P3 model, that timeline could be extended, meaning more collisions, more fatalities and more traffic bottlenecks on the single-lane highway.
While there is debate surrounding the actual and final costs for taxpayers, with the province releasing much different numbers from its critics, there is a single-minded drive within the provincial government to get this done as soon as possible.
There is a recognition of the need to keep costs reasonable, from the province’s perspective, but since their numbers deviate so wildly from the unions and CCPA, it’s impossible to know, at this point in time, exactly what the costs will be.
If history is any indication, the P3 process has wound-up costing the public far too much, especially where new schools were concerned.
Hopefully, this time around, the province has learned from those mistakes, and is seeking a way to get this highway twinned as soon as possible without going down the same financial rabbit holes.
If not, they will have finally twinned a highway and improved public safety, but they will have done so by costing taxpayers far too much money.