Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Archive for January 23rd, 2009

B.C.’s P3 projects not immune to world financial meltdown

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I have been poking around this evening looking for the announcement that Kevin “done deal” Falcon was supposed to have made this afternoon. It got no coverage on the CBC Vancouver at 6 News – there was nothing in my inboxes or on Twitter. So it was something of a surprise to find the answer at the Vancouver Sun

But on Friday, Transportation Minister Kevin Falcon was poised to make a sudden, late-day announcement about the Port Mann. Then, 18 minutes before the press conference, it was cancelled with little explanation.

Even more surprising it comes in the middle of a substantial story posted at 6pm this evening examining how BC’s P3 model is faring. And the Sun looks like, at long last, it has rediscovered how to be a newspaper. The shakiness of the P3 deals was becoming more and more apparent as more and more banks were showing that they were not at all interested in taking on risk. It has taken the Asper’s organ a while to catch up but give them credit for a thorough piece of work – with another nice quote from my friend Eric.

Note too that on the Golden Ears Bridge risk was not transferred in terms of usage. The operator gets paid the same no matter how many cars go over it. So, just like the Canada Line if the traffic forecasts are wrong then we the taxpayers are once again on the hook. And after spending far too many years around transportation forecasts I think it is not an exaggeration to say that the ones that are right are the exceptions. Most forecasts are wildly optimistic – because they are produced very early on in the process, are used to get approval – and then are not usually revisited even though their assumptions may be proved to be questionable long before the project is delivered.

Friday afternoon is also the time that is typically used to bury items that have to be announced but that it is hoped no-one will notice. So to plan to have one then – and then cancel it is most unusual.

Written by Stephen Rees

January 23, 2009 at 7:23 pm