Sharing funding of infrastructure projects with the private sector will end up costing taxpayers even more, provincial Liberals say.

Opposition leader Ken Nicol told a news conference in Calgary last week that public- private partnerships – commonly referred to as P3s – are a mistake because the government can borrow more cheaply than the private sector, and it doesn’t have to maintain shareholder equity or pay a profit.

A school that costs just over $5 million up front would cost the taxpayers $9 million over 20 years if they were leasing it back from the builder, he said.

Nicol added Alberta can pay for the schools it needs now without waiting a few years because it has the money in the $3-billion budget surplus.

Ken Nicol

If the government concentrates on paying the provincial debt, said Nicol, by the time it celebrates paying it out in 2005 Alberta will have a major infrastructure crisis.

The province should instead include infrastructure debt in its debt calculations, he said.

The infrastructure debt is the cost of infrastructure projects that are needed but not built, as well as repairs and maintenance to existing infrastructure left undone.

But a spokesman for the Infrastructure Ministry says the province supports P3s in principle where they are appropriate.

David Bray said renting back a school built by a developer is not a true P3. In a true P3, all partners share the financial risks and rewards. Projects have to meet the test of “life-cycle analysis” of their construction standards and financial arrangements.

The partnerships were one of many recommendations in a 1998 report on school facilities.

They were also discussed at a symposium in 2001 in terms of what projects would be appropriate for P3s, what standards would apply and what conditions would be attached, Bray said.

The government spokesman added Alberta already boasts successful P3 models in health care – a view hotly contested by some critics.

Dave Smith, executive vice-president of the Calgary Construction Association, said the industry looks at P3s as viable, depending on the project and the stakeholders.

Industry is working with the city on guidelines for various ways of financing construction and delivering projects. In addition to P3s, there are the traditional design-bid-build, design-build, project management and construction management, he said.

P3s won’t work on all projects, just as design-build won’t work for everything, added Smith. The project must be analysed and the right procedures in place.

At the Calgary Catholic school district, spokesman Graham White said the district is opposed to P3s. It’s a public trust to provide schools for the children in a given community, he said.

And for Catholic schools, there’s the additional requirement that they be built on ground blessed before construction and the building blessed afterwards.