Showing posts with label private-public partnerships. Show all posts
Showing posts with label private-public partnerships. Show all posts

Saturday, May 27, 2017

On Public-Private Partnerships

Much has recently been written about the Trudeau government's plan to establish an Infrastructure Bank whose putative purpose is to leverage private sector money to help fund projects. One can legitimately ask why that is necessary, given the record -low rates at which the government can currently borrow money.

Trapinawrpool provided a Twitter link to an analysis that should give everyone pause. Perhaps its most salient point is this:
It appears that public private partnerships (P3s), and not low-cost financing, will be the focus of the bank. The likely impact will be interest rates of 7 -9% on Infrastructure Bank projects, instead of 0.8 per cent, the current federal borrowing rate.

In other words, the proposed structure will increase interest costs by a factor of 10: 8% instead of 0.8%. Those higher costs will be paid by governments, by higher user fees, or both. Municipalities are not blind to this issue, preferring public financing due to its lower costs and improved control over public infrastructure.
For a quick look at the forces of unfettered capitalism that may very well be unleashed by the cozy relationship that Mr. Trudeau seems intent on fostering and furthering with his corporate pals, the American experience with such dalliances may prove instructive, especially when the report describes the field day private interests are having with toll roads they financed:



Clearly, Canadians should be very, very worried about what lies ahead under Mr. Trudeau's plans.