| Using public-private partnerships (P3s) to build nine new Calgary schools could end up costing taxpayers twice as much as funding the school outright, say critics. They also charge that the government isn’t providing enough details on how the system will work. Alberta Education Minister Ron Liepert announced June 14 that the province will build nine elementary schools in Calgary and nine in Edmonton by 2010. Under the plan, a private company would finance and build the schools, and the government would pay them off with interest over a 25-year period.
"It’s completely ridiculous for them to say that this is going to save money," says Bill Moore-Kilgannon, executive director of Public Interest Alberta, a left-wing lobby group. "If you’ve bought a car or a house, you know that you’re paying more for it if you pay it off over time." Assuming an interest rate of five per cent, Moore-Kilgannon estimates it will cost the province an extra $200 million on top of the original cost of the school. Each elementary school will cost roughly $15.1 million to finance, he says. With the province posting a surplus of $7 billion last year, he argues that the government could easily pay for the projects outright.
The company that builds the schools will also be responsible for major repairs over the initial 25-year period, which he believes could be problematic. If a boiler needs to be replaced in the 21st year, he says many companies might simply choose not to do it. "There’s no incentive to pour money into (a school) if you only have it for 25 years," he says.
Harry Chase, a Calgary Liberal MLA who previously worked for 30 years as a teacher, agrees that private partnerships could lead to cost overruns and says the system is murky. "It’s the opposite of transparency," he says. "P3s mean going back into debt." Liepert wouldn’t give any details of how the process for picking a company to build the schools would work or how the schools would be built, says Chase. He’s spent several years studying the effects of public-private partnerships, and says every example he’s looked at has proven problematic. The government considered using private partnerships for several previous projects and pulled out of each one.
"If P3s are such a great idea, why did they abandon it with the new court building, the (Sheldon) Chumir Health Centre and the southeast Calgary hospital?" asks Chase, adding that the government can easily pay for the schools up front. "If education isn’t a worthy investment, what is?"
What’s more, the province opted not to build any high schools or middle schools that the Calgary Board of Education (CBE) named as priorities, says CBE chair Pat Cochrane. The board would also prefer if the province didn’t use P3s, but was still happy about the announcement. "Our priority is to get these schools into the communities," says Cochrane.
Kathy Telfer, a spokesperson for Alberta Education, says that the government has looked at failed P3 models in the past and that the current plan is different. The province will own the schools once construction is finished, she says, and the P3 model is better than the government paying for the projects directly. "We had a growing need for schools in this province, and this is more effective and efficient (than other funding models)," she says. |
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