Mandating transparency … or killing P3s?

Elizabeth Brubaker

Winnipeg Mayor Sam Katz is critical of Manitoba’s proposed rules governing public-private partnerships (P3s), calling the plan “undemocratic” and the province’s motives “sad and pathetic.” Ironically, he may have himself to blame.

In May, the provincial government introduced The Public-Private Partnerships Transparency and Accountability Act. The proposed act requires the disclosure of information about major public works projects that will be designed, constructed, financed, operated, or maintained by the private sector.

When considering a P3 for a capital project expected to cost $20 million or more, a municipality will have to follow an elaborate procedure. Although the details will be specified in regulations to come, it seems clear that some of the requirements – an analysis of expected costs and benefits, for example, or public consultation – are common-sense procedures that municipalities already routinely follow.

Other requirements, however, are less routine. A municipality will have to appoint an external consultant to monitor the procurement process and prepare a report – to be reviewed by the Auditor General and made public – summarizing the process and the terms of the P3 contract. The municipality will also have to provide regular status reports on the project over the course of the partnership.

Upon introducing the legislation, Manitoba Finance Minister Stan Struthers explained, “our fiscal responsibility to Manitobans requires greater transparency in the disclosure of the plans and financial decisions relating to contract agreements and management practices.”

Greater than what? Although he did not say so, many assume that the reference was to Winnipeg’s notoriously un-transparent handling of its relationship with Veolia Water. When the city considered a far-reaching relationship with the water giant – a strategic partnership involving the planning, design, construction, and financing of upgrades to two wastewater treatment plants and, potentially, subsequent operations of the plants – councillors complained that even they were not privy to the financial details.

In the end, the city and Veolia agreed to far more limited arrangement involving “expert advice” rather than private financing or operations. The city has refused to make public the 30-year agreement. Just last month, Manitoba’s Public Utilities Board – which has general supervisory jurisdiction over Winnipeg’s utilities – complained that it has not been given access to the agreement:

The Board accordingly is disappointed with the secrecy surrounding the Veolia Agreement and the City’s refusal to file it with the Board, in confidence…. Transparency with respect to a 30-year commercial relationship is vital…. [T]here is currently no publicly accessible business plan or supporting rationale for the Veolia Agreement, other than a very high-level summary. This summary leaves out a number of issues, most importantly the actual projected construction and operating costs, the amounts paid to Veolia under the Agreement, and how the projected costs to the City compare to the previously recommended services delivery model.

The Board noted that, a year-and-a-half ago, Mayor Katz promised to share the details of the Veolia agreement. He assured City Council, “there is no level of government more open, honest and transparent than this government right here…. [W]hen the contract is signed, I’ve already said on the record that I would share whatever information I have. Nothing has changed whatsoever.”

But now something has changed: Under the proposed act, it will no longer be up to the Mayor to decide whether to release information. Transparency will be mandatory rather than discretionary. This is as it should be.

 ***

But is The Public-Private Partnerships Transparency and Accountability Act really about transparency? Or is it instead a move by the NDP government to hamstring municipalities that want to pursue P3s? There are simpler ways to achieve transparency. The province could, for example, require municipalities to publish their agreements with their private partners. Milwaukee and Indianapolis have both posted their contracts with Veolia online. Why shouldn’t Winnipeg?

The province’s choice of a far more bureaucratic alternative suggests that it may be interested not just in assuring transparency but also in controlling the process and influencing the outcome. The Winnipeg Sun, calling the proposed rules “a pile of red tape” that will require redundant work and slow things down, complained, “This is nothing short of a slap in the face to municipalities across the province who have been choosing bids successfully for decades without any provincially-mandated overseer. Premier Greg Selinger might as well come out and say municipal governments don’t know what’s best for them.” The Winnipeg Free Press likewise chides the government for its “paternalistic attitude to the city.”

Others, within and outside the press, question the government’s motives for introducing the act. Mayor Katz pulls no punches on this issue, suggesting that the premier and provincial government are “acting only out of [the] need to pay back union friends who worked very hard to get them elected.” They are, he charges, “definitely motivated to kill P3s.”

Whether the proposed law is driven by a legitimate interest in ensuring that P3s work to the public’s advantage, or whether it is simply meant to please the government’s labour base cannot be known. What seems clear is that private service provision in Manitoba now faces a number of new hurdles. Once passed, the new law will secure public financing and operations of utilities as the default in the province.

Note: On June 14, 2012, The Public-Private Partnerships Transparency and Accountability Act passed Third Reading in the Legislative Assembly and received Royal Assent. It will take effect upon proclamation.

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One thought on “Mandating transparency … or killing P3s?

  1. Pingback: City Hall takes Responsibility?: Not Me | James W Hoddinott

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