Saturday, March 03, 2007

"Honest" Ed Stelmach - Stuck on The Past

A couple of years ago, just about every capital expenditure that the province talked about doing for infrastructure was a "P3" (Public-Private Partnership) - from building roads to schools and hospitals.

This week we learned that Stelmach's government is resurrecting this hoary concept to build new schools. Although slightly less problematic than a hospital, repurposing a school building is still an expensive and unlikely proposition.

First, schools tend to be built in the midst of residential areas, not commercial areas. That makes it quite a bit more difficult to make the zoning changes necessary to allow the school to become "office space" or other similar commmercial spaces. Second, schools are often heavily utilized as part of the community recreation infrastructure - with gymnasiums rented out after hours to all sorts of community recreation groups. Once the provincial lease has expired (if it is not renewed), those groups lose access to that space as it is remodelled for other uses.

This is taking a very short-sighted view of infrastructure. At the end of 25 or 30 years, it becomes "disposable". Essentially, taxpayers will pay out the full cost of the building and its operating costs, and then if some bureaucrat in Edmonton decides we "don't need it", we lose the benefit of the building as well, and it is turned over to private, commercial interests. In the meantime, we've paid the private interest not only the cost of the building and its operations, but we hand it the appreciation value at the end of the game as well. In contrast, the elementary school I went to as a child was already paid for back then, and still in use today - having given taxpayers double duty service at the cost of renovations and upkeep. Were it on a P3 arrangement, taxpayers would have paid for its capital costs several times over, with the bulk of it being pure profit in someone's pocket.

The reality is that a "P3" arrangement is nothing more than a financial shell game which allows the government to take capital expenditures out of "operating budget" instead of 'capital budget' - and thus avoid the "horrifying" prospect of the government carrying long-term debt. This is a very short-sighted approach to infrastructure and education.

"Honest Ed" seems to be more like "Recycled Ralph" - only slightly less of an obnoxious blowhard.

2 comments:

MAS said...

Steady Eddy is reported as saying that the government will pay for schools in the smaller centres but that the cities,Calgary in particular are on thier own. If this is correct then Stelmach has forgotten that his responsibility is foe the whole province not just the rural and smaller centres. All this will do is deepen the divide between rural and urban voters.

Anonymous said...

mas said.....

"foe the whole province"

hmmm methinks this is more prophetic than a typo.

SB