It's time for the Charest government to give up on public-private partnerships for the two teaching hospitals Montreal needs so urgently. The government can't even tell if the method will cost taxpayers far more than traditional building financing.
But instead of facing facts, Premier Jean Charest's ministers seem determined to ignore new evidence showing that the PPP model should be ditched, and pronto.
To the unbiased eye, the evidence is compelling: On Wednesday, Quebec's auditor-general - the first outside expert allowed to look at the PPP financing figures - slammed the government for tilting its calculations in favour of public-private partnerships.
A day later, the French-language station TVA reported that the projected costs of construction under the PPP model - already more than $2.2 billion - are expected to balloon by 60 per cent now that the private partners have been chosen.
Yet both Treasury Board President Monique Gagnon-Tremblay and Health Minister Yves Bolduc last week insisted that the government could not "allow itself to go backward." Gagnon-Tremblay said she was "confident that the advantages of a public-private partnership were still there."
But these "advantages," according to the auditor general, are notional, not real.
True, the PPP agency calculated that it would cost as much as 24 per cent less to build the Centre hospitalier de l'Université de Montréal (CHUM) in partnership than if the province built the centre on its own. For the McGill University Health Centre (MUHC), the savings would be around 17 per cent.
But to arrive at these figures, the agency "invented the most outlandish risks" for the conventional method, "while for the PPP model, the most probable risks were ignored," warned Stephan A. Brunel, a former independent consultant for the CHUM, in an interview with La Presse back in January.
For instance, the agency assumed that under the conventional model, the province would do next-to-no upkeep on the new hospitals for 30 years. After 30 years - the duration of the PPP - buildings would be 94 per cent dilapidated, and ready to be torn down.
In fact, government agencies do not let buildings decline this badly. The auditor general cited a 2000 "dilapidation index" showing that in the worst case, a building was allowed to deteriorate by 37 per cent. Half the buildings on the index stood at 20 per cent. But assuming the government would just let its two state-of-the-art hospitals fall apart is how PPP Quebec calculated savings of more than $9.4 billion over 30 years. The game was rigged, in plain English, in favour of the PPP model.
In another sleight of hand, PPP Quebec passed over the considerable financial advantage of the state operating on its own: When the government acts alone, TVA reported, it gets a 4.5-per-cent lending rate. When the private sector is involved, interest rates jump to between 6.5 per cent and 8 per cent.
So much time and money have already been wasted. Here's a message for Quebec: Forget the PPP and get these projects back on track.