When candidates from either political party engage the public
in this General Election, they might hear exasperation over the financial state
of the province. Now that the Government has discovered a (relatively) new
financing tool, Public Private Partnerships (P3s), with which to fund capital
projects like hospitals and long-term care centres, everyone needs reminding
that this new credit card has to be paid, too.

In 2017, Mary Shortall, Federation of Labour and CUPE local
President, vigorously opposed the idea and issued her position following Ball’s
announcement that the Corner Brook hospital would be built via P3.
Unfortunately, her concerns sounded far too self-serving and the subject went

In the two years since, the Ball Government has taken a deep
dive into the locally-untried P3 arena. Employed on occasion by most provinces,
it is a scheme in which private contractors design, construct, maintain and
finance facilities, often for a 30-year term. Typically, the government takes
ownership of the facility when the contract ends.

The Province is now committed to P3 projects having a value of
around $700 million — nothing like jumping in with both feet before the success
of the first P3 is even tested.

As it stands, the Government is committed to a $227 million hospital
and seniors ‘ long-term care complex for Corner Brook, long-term care
facilities in Gander and Grand Falls-Windsor (cost unknown), the Waterford
Hospital replacement for St. John’s ($200 million) and, most recently, a new
Adult Correctional Centre replacing the HMP ($200 million).

Premier Dwight Ball unveils Corner Brook Hospital using Public Private Partnership

What is the allure of the P3 concept? Conveniently,
governments argue that the scheme transfers much of the construction risk to
the private developer, winning lower costs. The theory sounds plausible if only
because most project costs exceed the budgets even using traditional approaches
to construction like “Bid, Build” (BB) or “Design, Bid, Build” (DBB).

P3s: Government Not Ready and They Are Not Risk Free

Missing from the argument is that government is its own worst
enemy. Costly change orders as well as poor oversight are the bane of
budgeting. Some of it is due to political interference, too, when construction
deficiencies are resolved at the political level, rather than under the hammer
of inspectors hired for the purpose. You can bet your booties that this problem
won’t go away under P3s.

The big attraction, however, is that the cost of those
projects won’t show up on the government’s balance sheet. Meanwhile it funds
projects through the Capital Account, too. This issue is important because
government’s debt burden has reached a critical level.

Knowing this, politicians are still unwilling to either curb
voters’ appetites or re-establish priorities. In an election, is any Opposition
Party going to object or show how fiscal room should be made (i.e. what cuts to
program funding do they propose) when seniors’ care, hospitals, and prisons are
deemed a social and political priority?  

The very structure of the P3 requires that the full amortized
costs — capital and operating — will be included in the Government’s annual
Current Account expenses. Having committed itself to Budget balance by 2022-23,
the costs associated with $600 million of public private partnerships — along
with the operating costs of the new facilities that are not replacements — are
all part of that budget balancing act. Of course, no one takes the promise

There are other questions, too. Is the P3 concept the best way
to employ public money when the planning and construction of such facilities lie
exactly within the government’s wheelhouse? Doesn’t it make more sense to
employ a “partnership” when skills not available in-house are found though the
P3? Is such an approach too rational when the scheme is of a kind that relates
chiefly to the exigencies of partisan politics?

Let’s not kid ourselves. P3s do not represent a slavish fealty
to the concept of “lowest cost”. If that were the case, they would be more
carefully pursued. P3s are a convenience for a government in a financial
pickle. Debt by any other name is still debt.

Prior to selecting the P3 model for the new HMP, the Ball
Government employed the services of EY, a Consultancy, to advise regarding
procurement options. It reported that that the Government should adopt the
Design Build Finance Maintain (“DBFM”) or P3 model “instead of the traditional
DBB (Design, Bid, Build) procurement methodology.” EY suggested that the DBFM
would provide greater VFM (Value For Money). They quantified the advantage by
suggesting that, on a Net Present Value basis, costs would be reduced by 11.9%.

Unfortunately, what the public actually gets to see of the EY
analysis is pretty thin gruel. Not even the basic data used is included in the
report, making third-party scrutiny impossible. That is one issue.

Another is this: anyone having observed the Muskrat Falls
Inquiry these past few months ought to be suitably jaded by the claims of
consultants. Not all consultants — but many — were found to be unwilling to
disappoint a customer. They even allowed Nalcor to edit their final reports.

All the issues noted bear on the questionable wisdom of P3s,
except in unique circumstances, but none so much as the fact that the NL
Government has no expertise managing a P3 from start to finish.

That was the case when the P3 model was discussed in 2017 and
there is no evidence — whatsoever — that the Ball Government now has, within
the key Departments of Finance, Justice and Works, Services and Transportation,
a core group possessing of the knowledge and expertise to either write the
contracts or manage them.

On the other hand, we can be reasonably certain that the
private sector entities entering into P3s won’t be risking their money quite so
unwisely. For P3s to work to public advantage, the real challenge is in the construction
not just of the standards of the facility but, critically, of the thoroughness
of the 30-year agreement — which could kill a good deal right from the start.
One professional watching is especially doubtful of the state of the buildings
Government will inherit when the 30-year P3 contract expires. 

In her 2017 comments, Mary Shortall expressed the concern that
the private sector would earn a profit on P3s. She said, “So it’s either less
workers doing the same amount of work or less wages.” Had Ms Shortall prefaced
her apprehension over “profit” with the word “unwarranted” she might have
attracted a bevy of free-enterprisers to her point of view, too.

To be fair, CUPE did put some work into gathering analysis of
the results of P3s undertaken from Nova Scotia to B.C. by Federal and Provincial Auditors General who gave several a failing grade. CUPE’s research, wittingly or otherwise, included none that were successful.

In this Province, given the emphasis on the projects to be funded rather on the process used to enable them, the public might just conclude that P3s are just another way of doing business. As unfortunate as that fact is, it still doesn’t change the reality that, when it comes to P3s, the
Government likely doesn’t know what it is doing. And for that reason, they represent a costly risk to Ms. Shortall’s membership and to the
public, too.

Des Sullivan
Des Sullivan
St. John's, Newfoundland and Labrador, Canada Uncle Gnarley is hosted by Des Sullivan, of St. John's. He is a businessman engaged over three decades in real estate management and development companies and in retail. He is currently a Director of Dorset Investments Limited and Donovan Holdings Limited. During his early career he served as Executive Assistant to Premier's Frank D. Moores (1975-1979) and Brian Peckford (1979-1985). He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB). Uncle Gnarley appears on the masthead representing serious and unambiguous positions on NL politics and public policy. Uncle Gnarley is a fiscal conservative possessing distinctly liberal values and a non-partisan persusasion. Those values and opinions underlie this writer's views on NL's politics, economy and society. Uncle Gnarley publishes Monday mornings and more often when events warrant.


Bill left public life shortly after the signing of the Atlantic Accord and became a member of the Court of Appeal until his retirement in 2003. During his time on the court he was involved in a number of successful appeals which overturned wrongful convictions, for which he was recognized by Innocence Canada. Bill had a special place in his heart for the underdog.

Churchill Falls Explainer (Coles Notes version)

If CFLCo is required to maximize its profit, then CFLCo should sell its electricity to the highest bidder(s) on the most advantageous terms available.


This is the most important set of negotiations we have engaged in since the Atlantic Accord and Hibernia. Despite being a small jurisdiction we proved to be smart and nimble enough to negotiate good deals on both. They have stood the test of time and have resulted in billions of dollars in royalties and created an industry which represents over a quarter of our economy. Will we prove to be smart and nimble enough to do the same with the Upper Churchill?


  1. P3s, I don't know enough about that to even comment, but guess there are lots of others in the same boat. So for the purpose of discussion I guess I could comment but my advice is probably not worth the ink it is written with. But the first thing I would say, is that P3s or anything else we know so little about, should not be a topic during elections, as an rational opinion goes out the window in favor of party politics. To a large extent that's what got us muskrat. KD still insist that we had a couple if referandum on muskrat in the form of elections. And no doubt partisan politics played a major role in giving the governing party the green light to go ahead with muskrat. They claimed support support well above 70 percent. Cooler heads should prevail, and p3s should not be a green light or a red light in this election. I believe both major parties are both in favor of p3s, certainly the Davus government was. Since the proper discussion has not occurred to make it the way to go, that decision should be had after the election, or we should at least have chesses stand on P3s. Now, when taken outside the political spectrum, we know that when govt. is calling the shots in telling contractors what to do there will always be massive overruns. EM called it "red meat syndrome". or at least it was banded about in the inquiry. How about the weeks of heavy equipment that was idling on full pay, the sheets of plywood that were put up daily, and removed the next day, and repeated day after day, just to give the impression that work was being done, or the generators and other equipment that was brought to the sight years in advance, stored, rusted and needs refurbishing, all done in the name of government calling the shots, and "the government is good for it" mentality. Would a contractor that has full control over all aspects of a " build" not be more prudent and have a plan of "just in time" policy to avoid those kind of overruns ask Joe blow.

    • Joe @ 09:01:

      Simply put, if a client is trying to unload either risk or project tasks onto another party there is a cost associated with it.

      The cheapest way to building infrastructure is the government design and manage the contractor, the most expensive way is either a turn-key or P3. The only way to determine the real costs associated with a P3 is to review the green-sheet estimates and do a bid-crash, assuming each option was properly costed before a method was selected. There is no rule of thumb to say a particular method is best for a particular piece of infrastructure, client or service type etc – a proper cost analysis need to be done on each option.


    • Agreed, PENG2. Stipulated Lump Sum Bid was the better option in my day. The corrupt EPC and other variations, giving latitude for "Commercial" and "Technical" management considerations, brought about increased Administration and Soft project costs, overages, delays, delays, claims, lower quality, etc. Design Build and PPP rarely, if ever, gives the Owner the advertised added value.

    • Robert @ 12:31:

      If an unequipped owner is at the helm, no matter the project setup, it will fail in most nearly all aspects – likewise costs/schedule will also overrun if the contractor is unequipped. I don't necessarily agree with EY that there is a 1 size fits all project setup – too many variables.

      Now, if considering P3s, it would be hard to argue that Emera/NS are going to get good value from the Maritime Link – I think there are enough similarities that the ML can be classified as a P3, and Nalcor/NL was an unequipped owner.


    • PENG2 @ 14:44:

      Typo correction:

      Now, if considering P3s, it would be hard to argue that Emera/NS are NOT going to get good value from the Maritime Link – I think there are enough similarities that the ML can be classified as a P3, and Nalcor/NL was an unequipped owner.

    • Robert @ 17:39:

      Just getting a the fact that when a client sells themselves to a P3, but usually:
      1) they have no other options looked at for financing/management – more or less, only a P3 version has been considered
      2) there are no backup plans and the project is necessary – either by neglect of existing infrastructure, progress on other projects etc
      3) the client doesn't have the ability to execute the project themselves – so they have no leverage with the contractor

      When considering #'s 1-3, I would say that would make an owner unequipped and at the mercy of a contractor – not a good position to be in.

      P3s are not always the best nor the worse option – but if you commit yourself to a particular option too early in the process you will most likely get burned by the outcome.


    • Robert / Joe:

      I guess the simplest way to think about the concept of P3 vs other infrastructure financing/building operations is to use the analogy of a home owner looking for a new house, his options are:
      1) build
      2) buy
      3) lease
      4) rent

      Each of these 4 options gives the end owner a different ROI, and the end owner has varying responsibilities for ongoing financing and operations – for each of these options, the end owner makes different regular payments and the contractor gets to keep a different amount of that payment as profit.

      Personally, I think the discussion on the accounting aspects is B$ – little more than a political ploy.


    • Interesting you mentioned the 4 options for a house, as this is my personal experience, but certainly did not use the p3 term, but it turned out to be the best option for the buyer, as a matter of fact I think the contractor lost his shirt and went out of business a couple years later, but did start up again in another development. I bought a house in a new subdivision, adult living, at the beginning of the housing boom in the St. John's area, but it also include some leaway for the buyer to have input and could actually do some of his own work, like painting, build own patio, etc. and make some changes to the orgional plan with very little cost to the agreed upon orgional price. Five years later or so, sold the property at twice the orgional price, of course that was at the height of the housing boom. So, it was a buy, input into the build, and mainly to the advantage of the buyer, not sure if that's a p3, but from the buyers prospective it was a great deal, except not great for the contractor. But I don't think that can be used as a direct comparison to govt and p3s. Average Joe.

    • Joe @ 10:04:

      I mentioned the 4 options as they are the same as any client has available – a P3 would probably be most like a lease, little capital invested (and little risk on maintenance or operations) but higher payouts over the life of the infrastructure.

      The point of the 4 options is to show the initial capital investment vs operations/maintanence risk vs ROI are related.


    • PENG2, I would equate a P3 to buying a condominium; a bit of a pig in a poke. Unknown building deficiencies, uncertain fees for services, bad management, high maintenance. Sure, ROI when you sell into a hot market. Muskrat comes to mind.

    • Hi everyone.

      Can someone gives due credit to PENG2 about this 2011 Telegram Editorial?

      It was indeed published in the Telegram in Oct 2011 (As comfirmed by this PUB clip compilation).
      And the names of the 3 authors were also comfirmed later, also at PUB.

      You might sometime not agree with someone's opinion, but I just don't agree with the systematic destruction of the messenger (versus constructive debates).

      Oops, I might now be the target… 😉

    • Was the McGill hospital in Montreal by SNC Lavalin a P3 project, wherein approximately $33 million in bribes were paid to Artur Porter, a friend of Phillipe Couillard, and Arthur's assistant? If so, we don't need that kind of arrangement here and can't afford that here in NL.

    • OK, Ex-Military, I thought you were sandbagging the flood waters, while talking up the need for Municipal councils to get with the Sustainable Development theme. What do you think the impacts, should Society follow the recent Fed Bill on this important issue?

    • EX, interesting what turns up on Google searches.
      PENG2 put the long piece in from the Telegram, which was interesting, and new to me. Though prompted by Bruno, PENG2 never gave dates, and from your and PENG2 exchange I decided to dig. The PUB site from Feb 29 2012 gives this same info, and filed by Richard Cashin, Ed Hearn, and Dennis Browne (now the Consumer Advocate). They 3 of 5 members of "2041 Group". Wonder why PENG2 would not give the names, as this is in the public forum.
      So I accept that it was likely in the Telegram, but I expect a OP-Ed piece not an Editorial, I would guess that the piece was better than what the Telegram staff could write.
      So I asked Bruno, yesterday if he would admit a mistake on his part, as to his comments, but expect he will still want Telegram dates.
      But my search on the PUB site led me to, I think, much better pieces:
      1. By initials JM, very details analyis, which I had read part of before, but not all. And JM still a mystery. Seems a knowledgeable as an engineer and economist, but says this report is not reflective of his main field.
      2. Other by I think Ed Conway? need to check, but an economist from MUN and other universities and also a lawyer,A prof at MUN for a while, now long in Ottawa area, very impressive piece, which seems to have got no attention. They contain much good analysis and conclusions.

      I wonder if you, Robert, PENG2, Bruno and others have read these and what you think? Also they have merit as to going forward( as Robert stresses) as to system demand, elasticity, CDM, and wind power issues.

    • I indeed did some voluntary sand bagging during the weekend. But I'm not personnally impacted.

      Well, municipalities shall be held accountable when issuing building permit in a suspected flooding area.

      (They are in a conflict of interest as they want to increase their taxation base by issuing rhose permits, but expects gouvernments to pay when flooding occurs).

      But all that debate is decades old. Nothing new under the sun – oops under the rain I mean.

    • WA @ 21:26:

      To be accurate, if you read my reply to Ex, you would have seen that I did infact give the necessary info to find the editorial as presented by the Telegram – it was part of a file submitted to the PUB, also it is part of a file I have provided the web link to here several time before.

      What I posted was as in the Telegram in Oct 2011 – and filed with the PUB 27-Oct-2012, it is not my place to disclose the author, but I did give the info for people to find it. FYI, it is also available on 'pressreader' – but people will have to look for it.


  2. Although the contract details are important and NL has shown no ability to negotiate successfully there is a more fundamental reason to avoid PPP.

    PPP are fundamentally an accounting trick. Under normal financing the costs are put on the books when a project is completed. Under a PPP only 1/30 appears each year making the books look better. In addition the profit is added to the cost making the overall cost much higher.

    This is the favorite trick of a government unable to manage their finances. In NS they have been a bust and have now largely abandoned PPP schools after they were leaky from the getgo.

    Beware of governments offering PPP gifts! NL has backloaded enough debt to your grandkids with MF. Do not place further burdens on future taxpayers.

  3. I simply, at this time, cannot trust our government with the public purse. P3s may be a viable option but not with the fiscal managers of our government. If we cannot afford to build something, we simply should not. Accounting/credit trickery is not the answer.

    • I suppose we are on the PPP topic, as a timely discussion prior to election. As if the Liberal/PC agenda approaches PPP with different platforms! Both Parties have utilized silly economics across Canada, if it serves the backroom lobbyists. Since the 1980's, when the Mulroney Gov. disbanded the PWC model, in favour of the "Open for Business"/Board of Trade/Chamber model, one must question the merits of public infrastructure machinations through 1)Guaranteed Upsets, 2)Design Build, 3)Build, Operate, Transfer, 4)Gov Lease back, etc. One thing is certain; The Banks and Insurance businesses never lose. The Public purse is "free money", and the taxpayer gets hosed.

    • And owners of major General Contractors here on the Board of Directors of govn agencies:Nalcor or Nfld hydro and Health Boards, and is this not a conflict of interest, when these bid on P3 proposals?

  4. So, Concerned Citizens all: Let this Forum play its preferred and beneficial role in the election, (Best Candidate Running, and District).
    Premier of the hoped for minority Gov. ?
    Finance Minister Coalition. ?
    Minister of Education. ?
    Minister of Health. ?
    Minister of Social Services ?
    Minister of Mines, Energy, Natural Resources. ?
    Minister of Governmental Affairs. ?
    Minister of Municipal Affairs and Housing. ?

    Who have I left out?

    • Vote for new people and parties – best to have a weak and divided coalition since none of them are trustworthy. Alternatively, vote out anyone that is currently serving.

      Ask candidates if they are willing to express opinions that run counter to their leader or party policy. Watch their reaction. If they are just going to tow the line, then they are useless because rather than representing you, they are representing the pre-approved party leader and his corporate sponsors.

      It is highly unlikely that any elected official will have the skills or knowledge to run ANY government department. For that, they need experts. Unfortunately, deputy and many assistant deputies are political appointments from the past, and are seldom the best people for the job.

      Ask a candidate, if given a cabinet portfolio, would you consider firing the senior staff and holding public job competitions, overseen by a fair 3rd party (government HR is corrupt) to find the best people?

      In order to change direction, the senior bureaucracy must be changed. They also need to be enabled because serving "at the pleasure of the minister" means they cannot make unpopular decisions without getting fired.

  5. So here we have the new AB Cabinet appointments, one of which is Energy;

    Energy: Sonya Savage, Calgary-North West. She practiced law for 13 years before moving to a role in the pipeline sector for 12 years, including as senior director of policy and regulatory affairs for the Canadian Energy Pipeline Association.

    Surely, Ches and Dwight have a suitable Lawyer, with Power transmission experience, to take on the Hydro Engineers at NALCOR.

  6. Hi Winston, if you scroll down half way down this PUB PDF (google "14-MC-2012-02-27" – provided by PENG2) you'll see the date: Octobre 6th, 2011. Indeed, it does not identify the authors yet.

    So I found that same text, but this time as a letter submitted to the PUB.

    You'll note it's indeed the EXACT same Telegram text PENG2 has been talking about, except for that very last additional paragraph and the 3 authors clearly identified afterward. 


    • Ex @ 21:56:

      I made a typo above, off course it was presented to the PUB 27-Feb-2012 (not 27-Oct-2012 as I typed above).

      You have made a mistake – the date of the editorial preceeds it in the file I referenced, 06-Oct-2011 references the letter by the then head of the Mathematics Department at MUN regarding taxing offshore gas.

      I have tried to make a discussion of this compilation before – showing just how much opposition there was to MF and to show how many technical and prominent persons voiced concern before the NL General Election of 2011 to little avail.


    • Soooooo.. PENG 2 has lied about this claiming it was a letter to the editor. It was a submission to the PUB. I wonder why the lie?

      The authors were Richard Cashin, PC, OC Edward Hearn, Q.C. Dennis Browne, Q.C. Was one of these folks the mystery man PENG2?

      Winston you are becoming a troll. You don't respond to my links that prove my points. PENG0 lied, you seem to miss that. Try watching and learning from Amory Lovins, long an advocate of renewables. Watch it and learn.

    • PENG2, I went through, and read many of the Telegram pieces, some of which I recall from the past, some not.
      1. Many are by the some authors,so maybe not much more than 25 different people, or about 0.00008 of adult population. Russell at the Telegram the author of most , I think, a good author , but with little technical knowledge, and who sought no input from people with technical knowledge, did he? I recall him once saying no one wanted to talk. I think they made little effort.
      2. The Telegram is little read outside St Johns. 10 years ago at UIC convenience store, serving a population of about 1500,they sold about 30 papers on the weekend, and close to zero during the week days.They would drop off about 5, which went unsold. This suggests few of these letters were ever seen in rural Nfld.
      3. A few of the letters have technical info of interest, even today, that has been overlooked: especially on wind and small hydro.
      4. How many engineer authors are there in these letters? Maybe 2 or have I missed some? How many business owners? One letter by the Oiland gas industry, pro Muskrat, represented many businesses, and of course the BOT were known to be all in for MFs.
      5. What percentage of MUN profs wrote letters? Is there more a single author from the electrical, mechanical or civil engineering departments combined?
      6. Generally I think the number of technical and prominent people who wrote are pitifully small, given the size and potential negative impact of this project. We see that most letters to the Telegram seldom get more than a few hundred being read online, but a speeding auto, or dog that nearly drowned, gets twice or more the attention of readers. A mystery why so few objected to power rates increasing at least 50 % , while if gas goes up 2 % many line up to save a buck.

    • Bruno, guess you don't like named trolls like peng2 and myself, but at least we always write under our handle rather than just anonymous. So why not accept, rather than nit pick about lied, if it was to editor, PUB or where ever, the point was it was in the public domain, not once or twice but appears to be many times. No big secret. Even Winston is a troll now, but guess you two guys have an on going friendly fued, but all allowed on this blog if it gets by the Uncle. Cheers, Joe blow.

    • WA @ 09:54:

      I think you are making a mistake in the exposure the Telegram would have given. In 2010, daily circulation was 25k paid units and this increased to 38k paid units on the weekend (paid units also exclude about 25% of the distribution) – by comparison, there were about 220k voters in the 2011 general election (KD received over 56% of popular votes at ~124k). So, I would argue that upwards of 40% of voters had a daily copy of the Telegram in their home, but more importantly, 100% had access to it either via the Telegram or other publication such as the Western Star or the Compass by purchase. Id say UIC is not representative and probably an outlier.

      Regarding the compilation file, my reading gives the following (I am quoting what I posted before by memory, so apologies if I make an error or omission):
      1) 9-11 former provincial members (most PCs)
      2) 6-8 professors of MUN (departments of Engineering, Physics, Math, Economics and Business were represented)
      3) many others such as JG, JH, JM etc with long resumes in Engineering and Business – many specifically hydro related
      4) many ‘average joe’ citizens

      Lots of decent technical info was in the compilation – but remember at that time even the government wasn't quoting how high post-MF rates were going and Nalcor wasn't giving out much info on alternatives. I suggest you should do a better read – and keep in perspective of 2011 pre-election/pre-PUB hearing.

      Joe @ 10:06:
      I wont address personal attacks, but re-check my postings – the source info was clear IF someone read (and provided several times prior to).


    • WA @ 10:24:

      The main point is, when reviewing info from 2011, it needs to be considered as to what we knew at that time – and that we were approaching an election.

      What we can say, is that the public ignored the MF warnings, the MF warnings were significant and the public gave KD a mandate to proceed with MF – infact at >56% of the popular votes, even if the 2011 election was called a referendum she still would have gotten approval.

      This goes to governance – NLers ignore too much info that is available, and until we accept responsibility for our voting errors we wont improve – the present UG post (and publics depth of knowledge) on P3s is also representative of this naivety.


    • Bruno, who says he tells the absolute truth, disputes the said piece, referenced by PENG2, was in the Telegram, while the PUB summary says those were ones that were taken from the Telegram. Go figure.
      It seems they were both in the Telegram and the PUB filing, is this not so? Bruno seems to be deliberately misleading readers of UG. I am not absolute but feel 90% sure that it was first in the Telegram. How did PENG2 lie on this?
      Bruno says I am becoming a troll because I have not responed to his links. I have read them, and they are generally puff pieces of little value, by authors of extreme bias. Except for Scientific American, which was good, but that little supported Bruno's position.
      He also mentioned offshore wind contract off the NE USA. At about 8 power, he said I should SWOON at that.
      Thatcher , the Iron Lady, would say, " This lady is not for turning" when she was confident.
      Winston is no swooner, for 8 cent offshore wind power, especially when Nfld can supply onshore wind powewr likely for less than 4 cents cost. I have followed wind generation since 1991, on seeing up close,the many hundreds of units in California,95 % them not operating, having mechanical problems, but see the vast improvements in technology and reliability since then.
      Bruno suggest I side too much with engineers, as a profession. Has anyone on UG been more critical of engineers than I have been(except for Bruno). I have called out the the Nalcor engineers, Stratton, Bennett, others and commented positively on Bruneau, Mallam, F Martin, and I think, SNC. And too for Ex, and PENG2 ( more so on his technical knowledge).
      Perhaps Bruno can clarify how this suggests I am a troll?
      Is a troll a person who attacks a persons character,and provide no valid support or reasons and facts for the opinion? Being anonymous, to Bruno, is automatically a troll. I do not agree with that, nor am I anonymous. Bruno does not permit someone to respectfully disagree with him. I agree with him on some points, but not others. On morals and ethics and biases, I do not rank engineers above or below any other profession or trade. Generally I prefer an handyman over an expert, but specifically, I prefer an expert where an expert is required. I suggest Bruno sees himself as an expert, in all fields he comments on, even as to trolls.
      I have not much studied trolls, and first noticed the term when Ashley of the Telegram objected to critisism by MA.
      Prior to that , a troll to me was the creature with horns, that hid under a bridge and ate attacked innocent children. Now it seems troll hide behind the keyboard, and most are anonymous.
      Bruno says I am becoming a troll, not that I am one, so its not official, yet. The troll expert is uncertain.

    • For the record Winston,

      In Internet slang, a troll is a person who starts quarrels or upsets people on the Internet to distract and sow discord by posting inflammatory and digressive,[1] extraneous, or off-topic messages in an online community (such as a newsgroup, forum, chat room, or blog) with the intent of provoking readers into displaying emotional responses[2] and normalizing tangential discussion,[3] whether for the troll's amusement or a specific gain.

    • The consultant brought in to study the failure certainly did levy serious concerns about poor work culture and many sloppy red flag issues prior to the failure. Nalcor is responsible in the big picture. They appear to let one engineer be the fall guy though.

      It's interesting that PEGNL announces the sanction of the engineer who reviewed the design and didn't detect the flaws, and then a couple days later Nalcor accepts a big safety award for excellence on the Muskrat job.

    • We know by now that nobody was in the loop on the cost/finance side of the project. I guess we will find out if any of the prima donnas at Nalcor, oilmen and cable guys, were in the loop on the engineering side when the hearings resume starting tomorrow.

  7. Yes, lots of stuff back in 2010-2012 era online in opposition to muskrat falls for those who care to research it, but with my old PC clunker I usually can't do it or inclined to look. But was just reading an article by the telegram, dated sept. 27, 2011 with a photo of the 3 named, Mr's Cashin, Hearn, and Browne giving a news conference at the Super 8 Hotel in St. John's and denouncing muskrat falls. To quote the colourful Mr Cashin, he said there was a better chance of him giving birth than muskrat not having a 30, 40 or even 50 percent overrun for muskrat falls. That was during the provincial election of CD in 2011. Meanwhile, the article goes on to say, or suggest they were up staged, ( the brave fearless media more interested) by former federal industry minister and v- president, and V- chairman of CI BC Jim prentice giving a speach in Halifax entitled " Nation Building in the 21st. Century, The Case for Lower Churchill". You could say a speach on shafting NL to give NS free power. Jim was probably invited by Macky to give the support to his conceived project along with Harper. KD also referenced Jim Prentice as another reason she supported muskrat, guess she called him a world class expert too, says Joe blow.

  8. P3s are clearly the darling of the current Liberal administration and labour's opposition to them often ends up being something of an endorsement.The various AG's reports from across the country do point to some of the pitfalls in the P3 model but otherwise balanced assessments are few and far between. My own take is that they have their place but the widespread adoption by the Liberals without , as noted by UG, much experience in the field is high risk.

    However a few comments
    – UG noted that Corner Brook hospital and long term care will cost about $227M. Not likely – count on 2 to 3 times that number. The $227M will likely cover the current construction that is underway but not the acute care build.
    -if so much risk is truly transferred to private and those risks are realized then why is the industry so keen on P3. It isn't because these firms are making less profit than via traditional methods.
    – lots of mixed use of "less costly" or "cheaper" versus "better value for money". Read some of the AG's reports and these projects do not necessarily cost less. Rather the "better value for money" often (not always) comes from factoring in the better condition of the facilities at the end of the 30 year period.
    – "value for money" assessments" are anything but stringent analysis of the P3 model and how it would work on a specific project. They work well for their purpose which is to allow Governments to say the P3 approach was tested and validated. As a strong filtering mechanism in determining where P3s should or should not be used, they fail. Ask what percentage of projects submitted for analysis fail the value for money analysis test – don't be surprised the answer is in the single digits.
    – Competition: the number of submissions that Government has received on P3 projects does not support the idea that is a highly competitive market. Press releases say 2 or 3 firms were shortlisted for the next step, they do not say how many submissions were received. In other words did the short list of two come from 2, 5 or 10 submissions (certainly not the latter)?
    -Local Consulting industry- despite there being local engineers/architects named in P3 submissions most of the design work is not being done in this province.
    – I cannot tell if the Government really believes P3s are greatest thing ever to hit the construction industry or if they really know the facts and are pursuing them because of the balance sheet issue noted by UG. In other words it is either Government doesn't know better or it believes the public doesn't know better. Either way is not great so enough already

    • Agree that if less than 5 qualified bidders, that it will not be competitive. Also that local consultants lose to ones outside the province.
      That P3s maximise profits for the contractors, and risky if a wise move.

    • The P3 isn't a Liberal invention – even Steven Harper setup a federal ABC to oversee these constructions. Confederation Bridge is often used as a success story.

      The problem with wanting more bidders is bonding – I'd say there are only 5 companies that can access $250m worth of bonding. So considering this limitation, either a company goes all-in on 1 project or refuses the bigger projects to bid on several smaller projects hoping to get a couple; this isn't a hard decision for a small business.

      Moving from a design/build to a P3 to rent is all about risk transfer – and someone will pay for the lack of risk. If we consider a specialized construction such as a penitentiary, there is significant end-of-life and mid-life refits if a government decided to walk and leave facility with the contractor – and the contractor is going to make government pay for that risk.

      Pretty simple – either pay construction, ownership and maintenance/operations or pay the contraction for the risk. I wouldn't say the contractor is unjustly enriched in either case if the contracts are soundly executed.


  9. No private company will take on additional risk for free. Also, I don't hear of government complaining that their current buildings are too expensive to operate, they only complain of cost of labour to offer their services. I'm afraid with P3 we won't be able to afford either. If it ain't broke, why fix it?

    • Anony @ 22:46:

      It needs to be considered in a total life cycle costs analysis / green sheets and bid crashes like I mentioned above.

      If we considered the 'old' Janeway in Pleasentville – the government closed that facility after about 25-30yrs. So, if this had been constructed/operated under a P3 there would have been an option for government to abandon the facility after a certain time (say 30yrs) – if government were to execute the abandon option, the contractor would have been expected to remediate the site (or the bonding he originally placed would have been used). If there was a abandon option written into the agreement, there certainly would have been a ‘cost of risk’ fee associated with it.

      There is also the issue with government doing ongoing operations/maintenance – this requires additional public service forces and cost.

      There is no 1 right answer for a P3 vs other type of build – a thorough cost analysis needs to be done for every build type on every project.


    • Bullshit PEGTROLL, P3's in every instance are an accounting trick to take spending largely off the current books and greatly INCREASE the cost in the long term.

      P3 are a scam that burden future taxpayers for projects that the government can't fund through traditional arrangements.

    • Yesterday Bruno was explaining the meaning of a troll. Is not the description given by Bruno very closely resemble his own style, as given here and most of his insulting comments.
      P3s can be good of bad, and requires careful analysis, to avoida scam. Bruno lives in a black and white world and believes in magic and absolutes, so no middle ground, someone else's different view is always bullshit.

    • No Winston only if it smells is the plan bullshit.

      Can you give a single example of how adding profits to public spending is EVER cheaper in the long term? It smells to me and is ALWAYS an accounting trick for lazy and out of control governments.

  10. So we need to stop these P3s in their tracks, let’s phone Dwight and tell him we want nothing to do with hobbling our grandchildren with massive debt because of poor decisions made by our politicians.
    Do you think he’ll listen to us and realize that if we can’t afford it we shouldn’t build it?

    • I don't support building things that we can't afford, and will take decades to pay for. Of course muskrat is the best example of that. So ball et al wants to do p3s and pay for them way down the road. How about Chess, what's in his plan, has he told us? What does he plan on doing about p3s, I haven't heard. A few years ago the Davis govt was all for P3s. All l heard was chess said he stole some good ideas from the red book for his blue book, and ball stole his rate mitigation plan. So as Crosbie senior would say they are cheek to cheek, jowl to jowl, and bum to bum on that. And Mr Hollett confirmed for us that there was virtually no difference in their rate mitigation plan. Maybe chess told us all about that in the debate last night, but I didn't tune in. So we know where ball stands on p3s, we want to know where chess stands or sits on his Ppps says Joe blow.

  11. Let's stop this diversionary topic on PPP. As PENG2 says, it is just an option to finance and build something needed, or frivolous. The issue is, does whether or not you choose Ches or Dwight, what's the difference? We should be discussing how to elect the least risky government, (minority), to help our children survive the next 50 years or so.

    • I agree Robert, the best government for the people would be a minority one, but how do we ensure that happens?

      If my memory serves most minority government’s in Canada weather provincial or federal never last for four years. They are only around for a short time then are replaced with another majority government.

    • Terry, That minority governments last only a term or two, is not necessarily a bad thing. Lester Pearson in the 60's accomplished more good things, (Medicare, Pension Reform, Labour Reforms, etc.), while in minority with the NDP. Don't you think it timely that following the disasters befell NL with either and both mainstreams in majority, that the people deserve a more contemplative form of governance, for a term or two?

    • We definitely deserve better governance, the unfettered power that a majority gives the winner is too intoxicating. It blinds them and impairs their common sense. I just think that a minority government allowed to govern for four years would be better for the people, but that’s not the way our political system set up. The first sign of trouble in a minority government and the vultures descended looking for a feed of power.

    • Built a Y for the community, didn't he? self-made millionaire. Probably supported both major parties. Good business ethic. Where would he thrive under a minority gov.? Probably entering competitive bids on many socially and economically sound sustainable projects, for the common good.

    • Robert @ 14:19:

      Correct, Penney Group has roots back to late 60s, OConnell has roots to pre-confederation – both are great NL success stories (and were more wealthy than DW), no different than Dexter/Municipal in NS.

      If you look over the employee list of both – Id guess you would find lots that worked for Penney, HJOC, Lundrigans, McMamara and Dexter – would be difficult to find anybody in NL construction that didn't at 1 time DIDNT have employment with all of these groups.

      Not sure if coincidental or just representative of just how small NL really is when it comes to business.