Public-Private Partnerships

Not on time, not on budget

News item, June 10, 2005:

VANCOUVER (CP) – The British Columbia government has signed a deal with a transportation consortium to design, build and manage improvement to the Sea-to-Sky Highway north of Vancouver.

Transportation Minister Kevin Falcon said the project is on time and on budget after he announced the $400 million agreement with the S2S Transportation Group…

In a 2009 letter to the National Post editor, Falcon had more to say about “on time and on budget:

Re: Vancouver Should Pay, editorial, Jan. 13.

This editorial incorrectly stated that the Sea-to-Sky Highway expansion is “behind schedule” and “over budget.” The fact is that the $600-million improvement project is both on budget and on schedule…”

A 2012 report by the Auditor General noted the capital costs were $795 million and reminded that the public private partnership was responsible for building only part of the Sea to Sky Highway:

…the Province (represented by the Ministry of Transportation and Infrastructure) entered into a P3 agreement with the Sea-to-Sky Highway Investment Limited Partnership (a group of private companies) to design, build and finance about two-thirds of the highway improvements and to operate and maintain the entire highway for 25 years. The ministry is responsible for managing the remaining one-third of improvements…

We shall examine whether or not the project was “on budget” or slightly over the $400 $600 $795 million figure.

From B.C. Public Accounts (updated in FY 2019):

Since actual annual payments are almost 3x the contractual obligation, it looks like the $400 million Sea to Sky Highway improvement project will involve payments to the private partner of $1.5 billion.  And remember, the province financed one third of the project’s construction cost while the P3 financed two thirds.

6 replies »

  1. I’m assuming the ” S2S Transportation Group ” was chosen because it was such a great BC business group with years of experience and led by well known BC business people who had a record of giving back to their communities ? And let’s not forget the group is also open & transparent in it’s BC dealings.

    Guy in Vic

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  2. BTW The reason that the former BC Liberal government ‘found’ the money to start the current work being done on the Highway, just North of the Second Narrows Bridge (being finished by BC NDP government)(other than the fact that an election was on the horizon) is that they squandered $1.5+ Billion in 2005 to build the S2S and at the same time starved any other worthy project based on geography limits . The Sea to Sky Highway is just one section of many sections which includes the North Shore.

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  3. Here BC Liberal MLA Jas Johal attempts to throw transportation ministry staff under the bus for problems on the South Fraser Perimeter Road:

    “Johal says the previous government took the advice given to them by staff at the time, and rejected attempts to lay the issue of the bumps at the Liberals’ feet.”

    https://www.sootoday.com/global-news/scary-bumps-on-deltas-hwy-17-to-cost-more-than-3m-to-fix-province-says-1656936

    In the same article he brags about B.C. Liberals’ completion of three other projects. “We built the Sea to Sky Highway, we built the Canada Line, we built the Port Mann Bridge, he said…”.

    All on budget and problem free? Line up the buses:

    https://www.cbc.ca/news/canada/british-columbia/weak-oversight-plagued-b-c-megaproject-which-insiders-believe-cost-taxpayers-millions-1.4144535

    https://cupe.ca/case-study-community-impact-canada-line-p3

    https://lailayuile.com/2010/10/25/breaking-news-bc-liberals-inked-hidden-toll-into-sea-to-sky-highway-deal-and-we-all-pay-for-the-next-25-years/

    BTW, who was Mr. Johal working for at the time these projects were built that allows him to say “we” built them?

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  4. The same thing is true with the Canada Line.

    Forgetting the Liberal hype and hoopla about the Canada line P-3, the up front cost was about $2.4 billion.

    But…….

    The SNC Lavalin lead consortium operating the P-3, receive over $110 million annually for 35 years. or over $3.85 billion over the 35 year period, thus the real cost of the Canada Line is over $6.25 billion!

    Let me repeat over $6.25 billion.

    But when the P-3 is handed back to TransLink, if there is a TransLink in existence then, the metro will be in dire need of a mid life refit, costing in excess of $2 billion and if one want to extend the Canada Line, today, one needs a minimum of $1.5 billion to increase capacity beyond the current maximum capacity of slightly over 8,000 pphpd.

    Those cheapo stations with 40 metre long station platforms all must be lengthened to 80 or more metres (hugely expensive with the subway stations, where new entrances and exists must be dug and built), the signalling must be replaced and the terminus at #3 road must be double tracked.

    Throw those costs in the mix and in about 25 years the taxpayer will have thrown almost $10 billion down the SkyTrain black hole and just for the Canada line!

    Think I am crazy, well our regional politicians have approved $4.6 billion in approved funding to build 12.8 km of light metro.

    Meanwhile in Caen France, a new 16 km tramway, taking 19 months to build and replacing a guided BRT line, cost $373 million.

    Not Billions folks, but millions!

    Oh by the way, this tramway is also carrying 64,000 customers a day, 22,000 more than what the BRT line carried.

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