Ontario govt sour on privatizing roads after Cintra hikes toll rates & they can do nothing to stop them

Link to article here. PPPs or P3 stands for Public-Private Partnerships where the government partners with private industry on a public project. In Texas, they refer to these as Comprehensive Development Agreements or CDAs for toll projects granting the private entity almost limitless control over toll rates, control of surrounding free roads, the power to choose what businesses locate on the tollway, and control over our infrastructure for the life of the contract (usually 50 years); thereby leaving the taxpaying public little or no recourse though its a public asset.

Ontario behind times in P3/AFP money for roads
Roadbuilders are posed to use financing model for roads
BY PETER KENTER
Correspondent
Daily Commercial News
February 2, 2007

TORONTO
Whether you call it Public Private Partnership (P3) or Alternative Financing and Procurement (AFP) — the term favoured by Infrastructure Ontario — the province’s roadbuilders are ready to embrace the model in hopes that it will spur major projects.

However, unless the provincial government changes the responsibilities of either Infrastructure Ontario or the Ontario Ministry of Transportation (MTO), that can’t happen.

“Infrastructure Ontario has not been assigned any roadbuilding projects, so we aren’t working on any,” says Paulette den Elzen, manager of project communications with Infrastructure Ontario.

“At the same time, only Infrastructure Ontario is authorized to employ the AFP model. Different provinces are doing different things.”

Indeed they are — and roadbuilding appears to be one of them. From British Columbia’s Sea-to-Sky Highway and Alberta’s Edmonton Ring Road to New Brunswick’s Confederation Bridge, large scale P3 transportation projects dominate in provinces outside of Ontario.

“Other provinces appear to embrace this roadbuilding model and it doesn’t appear to be ideological,” says Dave Garner, manager of business development for Miller Paving. “There are provincial Liberals, Conservatives and NDP governments using the model. I’ve asked the same question — why no major transportation projects in this province? The province’s answer seems to be that they haven’t found a project that could fit the model.”

Garner says the biggest issue standing in the way of new AFP roadbuilding projects appears to be the province’s unhappy relationship with the 407 toll road. While the construction of the highway could be considered a successful P3, ideological disagreements with the 99-year lease won by the Cintra-Macquarie partners and its relative autonomy in setting toll rates have left a bad taste in the collective mouths of Premier Dalton McGuinty’s Liberals, who have repeatedly taken the operators to court in failed efforts to re-establish control.

“The province even adopted another name for it — AFP — so it wouldn’t appear to be changing its policies in mid-stream,” says Garner.

Jeff Morrison, executive director of the Road and Infrastructure Program, Canada says the federal government has encouraged the use of P3s by provinces and municipalities which receive federal funds for roadbuilding projects. “But that’s not to suggest that they have to use P3s,” he says.

Still, there are rumblings of plans to use AFPs for Ontario roads.

“The Minister of Public Infrastructure Renewal, David Caplan, has told us that he wants to introduce AFPs to the roadbuilding sector,” says Rob Bradford, executive director of the Ontario Road Builders Association.

“The mechanism is there, but we’ve seen nothing so far in terms of putting the systems into place to make things happen.”

“There doesn’t appear to be any thrust to put these projects on the priority list,” agrees Garner. “The 407 project got off the ground because Bob Rae saw it as a priority and instructed the Ministry of Transportation to approach it that way. We’ve been discussing an extension of the 407 for two decades now. It won’t move up anyone’s agenda unless somebody champions it.”

John Beck, CEO and chair of Aecon Group, says he’s optimistic the province can take advantage of the P3 roadbuilding model.

“The concept of P3s is widely accepted by the construction community and the province is using AFPs to build hospitals and courthouses,” says Beck. “With respect to the 407 toll road issues, these were resolved about a year ago. I’m confident the government will soon be looking at an AFP roadbuilding model even if that means private sector financing, construction and design without a privately-operated toll system.”

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