Stephen Rees's blog

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

Posts Tagged ‘PFI

Taxpayers cannot afford private financing

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This blog has long railed against what in BC is called “P3” and in Britain “PFI”. My objection started with the observation that while private finance appears beneficial because the debt disappears from the government accounts, this is merely a book keeping legerdemain. The debt is still real, still gets paid off by us, and gets higher simply because the private sector cannot borrow at the same rate as the government. The interest on private sector borrowing is higher.

The Guardian headline today comes as no surprise.

Taxpayers to foot £200bn bill for PFI contracts – audit office
Cost of privately financing projects ‘can be 40% higher’ than using public money

This news comes hot on the heels of the Carillion debacle.

I had hoped that, by now, our new provincial government would have made some announcement on unwinding BC’s disastrous P3 initiative. If it has, I must have missed it. But then Mr Horgan seems as enamoured as Christy with Site C and LNG so I would not be at all surprised if he is not also dead keen on pumping yet of our money into these rip offs too.

Jeremy Corbyn is now committing the British Labour Party to abandoning outsourcing altogether.

I was going to suggest that, at the very least, BC adopt what most other countries now insist on – a public sector comparator, since I believe that, in most cases, the need for the private sector to make profits makes them uncompetitive against the public sector, but I must also insert a plea for some recompense against some of the more corrupt practices here such as insisting that we pay for electricity we do not need from private sector companies that are large contributors to the BC Liberal Party. If anything P3 – BC style –  has probably been worse than the UK PFI.

Written by Stephen Rees

January 18, 2018 at 11:27 am

Posted in privatisation

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