November 7, 2001
Halifax Chronicle Herald

Don’t muddy harbour cleanup waters

By Brian Lee Crowley

THE CANADIAN Union of Public Employees and some members of the HRM council would like to see the Halifax Harbour cleanup done by the public sector, employing CUPE members. This is a reasonable goal, and one that should be debated on its merits. Relevant considerations would include the ability of the public sector to build nd operate the necessary facilities competitively with private sector suppliers, technological sophistication, remedies if the contractor fails to live up to its commitments, etc.

But CUPE and its friends, who appear to include Mayor Peter Kelly, are not willing to have their claims judged on this basis. Instead they are trying – pardon the expression – to muddy the waters with irresponsible and contentious claims about the dangers of public-private partnerships. Most of these claims are bogus, and are simply an attempt to try to extort a public sector solution to our water woes by default, not because it’s best for Halifax.

For instance, Toronto lawyer Peter Kirby, in Friday’s National Post, convincingly demolished CUPE’s argument that a public-private partnership in water sacrifices the government’s ability to protect Canada’s water heritage. Neither existing international trade agreements nor Canadian contract law in any way impair HRM’s ability to protect our water or the public interest.

Claims about the rapacious behaviour of private water companies in other jurisdictions do not withstand scrutiny either. Reliable, cost-effective water services are provided around the world by private, public and mixed organizations. That’s why the relevant consideration here is not whether the service provider is public or private, but what they promise to do and how much they want to charge for it under an enforceable contract arrived at after a competitive bidding process.

Equally unconvincing are the claims that somehow a deal is being cooked up behind closed doors. Council drew up an appropriate list of criteria for the project, invited bids, subjected those bids to a searching examination, both in-house and through some outside evaluators. They also had a so-called shadow bid prepared to give a yardstick against which to judge the private sector bids. After all of this, the proposal selection committee made a unanimous recommendation in favour of the Halifax Regional Environmental Partnership’s bid. HREP is a coalition of local and international companies that includes French water management giant Suez.

The benefits of going ahead with a public-private partnership are pretty clear: It’s cheaper, it’s more efficient, and it involves superior technology. CUPE cries that someone will make a profit out of it. Yes, of course. The profit is the reward for doing the job better and cheaper. The profit is not on top of what it would cost to do the job through the public sector. It’s the incentive that the private sector gets to deliver superior performance. It is precisely these features of the public-private partnership that CUPE and its allies, the Halifax Water Watch, the Council of Canadians and others, don’t want to debate. They don’t want this to be a boring, mind-numbing exercise of number-crunching to see who is going to give taxpayers the best value for their dollar. They want it to be a mythic and titanic struggle between good and evil.

But compare the winning proposal to the HRM’s own commissioned shadow bid. The HREP proposal is over $8 million cheaper than the shadow bid on design and construction costs. Yet the HREP proposal is a legally binding commitment. These guys are making a promise that they have to back with their own money. Not so with the shadow bid, which binds nobody. In fact, it has been recommended to council that an additional $8.3 million contingency allowance be added to the shadow bid to compensate for the extra risks its non-binding nature represents.

The proposal selection committee also lauded the HREP bid because of its technical superiority. This represents a significant opportunity for Halifax to benefit from the international expertise Suez and others have built up over the years in water treatment. This is a complex industry where technology is evolving all the time. We have a chance to jump to the head of the technology queue and to acquire exportable local expertise.

But financial and technical superiority are not the grounds on which the current scheme’s opponents want to fight. They are going to try to whip up unjustified hysteria about absurdly exaggerated “dangers” with a private sector solution, in the hopes that councillors will be frightened off.

They shouldn’t be. Council put in place a sound bidding process and it has received some good bids. After satisfying itself that its own process has been followed, council should see it through, and spend the public’s money cleaning up the harbour, not defending itself against the lawsuits that will assuredly follow if it abandons its process now.

Brian Lee Crowley is president of the Atlantic Institute for Market Studies, a public policy think tank in Halifax. E-mail: BrianLeeCrowley@aims.ca