12/2/12

P3 transparency? Hardly: private profit prefers privacy

Red Squaring by Rob Caballero
The corruption scandal rocking a public private partnership (P3) hospital project in Quebec has raised some significant doubts about P3s in Canada.


Over the weekend even the normally pro-privatization Financial Post ran a story considering such doubts. They allowed that the size and scope of P3 projects may make the projects a magnet for greed.

The Financial Post was, however, able to dredge up an academic to claim that P3s had improved public transparency.

This is pretty galling.  In fact OCHU/CUPE, several other unions, and the Ontario Health Coalition (OHC) had to go to extraordinary lengths to get any significant information about P3s. Even with the assistance of a very expensive legal challenge we were only able to get information for very restricted purposes, and only after much to do.

"Commercial confidentiality" requires privatization to proceed under a cloak of secrecy.  The corporations don't want to let anyone know their secrets -- not their opponents in the community, and not their competitors in the business world.  Transparency means revealing the truth -- problems and all.  Problems that may make it impossible for the company to continue (and continue to make profits).   Transparency also means revealing competitive advantages to competitors.  As a result, there is not much of it.

Most of the scandals that have rocked the Ontario Liberal government have been driven by privatization of public services (eHealth, ORNGE, the Brampton hospital P3).  And all of these have largely been turned into major issues by the fact that the Auditor General (who no one has ever claimed is a particular opponent of privatization) was able to get access to confidential information.

We really do need better access to information about public spending-- but private corporations looking to take over public services will be implacable opponents to transparency, whatever their rhetoric.

In Britain, however, there has been more scrutiny of P3s through the House of Commons and other public bodies (with the results often discussed on this web site).  The result has been much more public awareness of P3s -- and much more public concern about P3s.

We can provide more public oversight and transparency in Ontario too. But we are a long way from achieving that.

Problems in other jurisdictions?
On a related issue, what of other projects involving SNC-Lavalin?   The CBC noted concerns about wider problems in a story about police investigations into $139 million in payments by the company:


"I'm not surprised" about the reports, said Anthony Scilipoti of Torono-based Veritas Investment Research, which has been highly critical of SNC-Lavalin. In late April, the equities research firm published a report about the engineering conglomerate titled Skeletons in the Closet.  "I think it makes you question the controls throughout the organization, not just in that division, because it's all interrelated," Scilipoti added. "I think it makes you question all the deals that were taking place."

Aside from any problems with the $139 million in payments, there are $56 million in other improper payments by SNC-Lavalin.  Moreover, just after this CBC story came out, the former CEO of SNC-Lavalin was arrested on fraud charges in connection with the McGill P3 hospital project.

SNC-Lavalin is a giant corporation with a widespread reach.  Are other jurisdictions across Canada or elsewhere (aside from Switzerland and Quebec) investigating any problems?  What is Ontario, for example doing, if anything at all?

For the record, the CBC reports that SNC-Lavalin said it has no knowledge that the fees it paid to Duvel Securities Inc. and Dinova International Inc. between 2001 and 2011 might have been part of a laundering scheme.

1 comment:

  1. Ontario has just responded to the Quebec P3 scandal by bringing SNC-Lavalin into a $2.1 billion Ottawa Light Rapid Transit P3!

    Judging from their response to past P3 problems, the government will assure us that any problems are a thing of the foggy, distant past.

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