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WHAT’S NEXT FOR OUR INFRASTRUCTURE?
FluksAqua Community, FluksAqua insights,
Water is not qualifiable. But our water services are. It’s no secret that our infrastructures are in dire need of some extra help. In their May-June edition, Water Canada published “Flowing Funds”. In the article, Darren Sokoloski, the country director and president of ACCIONA Infrastructure Canada Inc. shares his views on the challenges facing the water industry. You can also discover his thoughts on a Public-Private partnership (P3) model to renew water infrastructures.
On the other hand, Philip Bazel and Jack Mintz from The School of Public Policy, argue that “The Free Ride is over: why cities, and citizens, must start paying for much needed infrastructure” in the 2014 edition of the School of Public Policy.
Read the highlights from the two articles below:
Is a P3 model the definitive solution?
Sokoloski argues that “the most publicized feature of the P3 model is the transfer of capital investment obligations from the public to the private sector.” The whole notion of paying for the costly infrastructures over time versus making a single large capital investment is validated with the P3 model.
“The value of the P3 model is derived from the more fundamental principles of efficient risk transfer; integrated development of design, construction, and operational plans; and a more effective matching of asset investment pofiles to the natural life cycle and renewal requirements of the asset,” Sokoloski writes. He goes even further and argues that this shift could bring forward positive changes in the water sector as “the process design and operational efficiency play a significant role in the total life-cycle cost of the asset”.
The P3 model, Sokoloski advocates, ensures an “aligment of performance and financial risk over the contract term ensures the life-cycle cost is optimized”.
Is this the new tidal wave for Canadian water infrastructures?
You can find an example of this model on the East Coast with the Safe Clean Drinking Water Project (SCDWP) in the City of Saint John, New Brunswick. (Note: Details are in the “Read More” section)
CITIES & CITIZENS: CAN THEY HELP?
Is a P3 model all that we can expect as a solution for this country-wide problem?
Bazel and Mintz disagree. They argue that “if governments moved towards more optimal pricing for infrastructure — tolls for major roads, transit fees and other infrastructure charges — a more efficient allocation of resources would prevail. Commuters would make wiser choices between housing and commuting costs, which would be less subsidized, thereby reducing urban sprawl.”
Furthermore, they add that “governments would make wiser budgetary and tax-policy decisions, trading off infrastructure demands relative to demands for other municipal services, including protection, parks and social services. Greater reliance on infrastructure pricing would also provide two other major benefits. It would impose a higher standard on local spending decisions and it would contribute to accountable decision-making, by creating a direct link between the localized costs that users face for infrastructure and the quality of services that they receive.”
Are cities and citizens willing to take that step in order to make a viable change in the water sector?
Our infrastructures are crumbling. They have been for decades. We have to turn to our elected officials and ask: what are the next steps for the maintenance of our infrastructures, how much are we willing to pay out of pocket for this service and maintenance.
We have much to learn from the city of Saint John in New Brunswick and we must contemplate what this P3 model represents for Canadian infrastructures.
One thing is certain, we cannot afford to ask this question without providing a firm answer any longer.
PPP Canada. (2013). P3s can deliver innovative and cost–effective solutions to water and wastewater infrastructure gaps. http://www.p3canada.ca/~/media/english/press-releases/files/wastewater%20sector%20study.pdf
Saint-John. (2016). Safe Clean Drinking Water Project. http://www.saintjohn.ca/en/home/cityhall/sjwater/drinkingwater/safecleandrinkingwater/default.aspx
The Canadian Infrastructure Report Card. (2016). Potable Water. http://www.canadainfrastructure.ca/en/drinking-water.html
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