The Sea to Sky Highway Improvement Project is under attack on a new front - but instead of arguments over the route the road will take, some labour groups and municipal councils are criticizing how it'll be paid for.
West Vancouver Mayor Ron Wood has asked B.C.'s Auditor General to look into the -private partnership (P3) proposal to design, build, finance and operate Hwy. 99 from Horseshoe Bay to Whistler.
West Vancouver has been involved in a very public battle with the provincial government over the proposed route for Hwy. 99 through the Eagle Ridge area. The province announced last month it intends to build a four-lane overland route, while West Vancouver is pushing for a two-lane tunnel under the area.
" The Ministry has overestimated the costs for the tunnel route and underestimated the costs of the overland route by selectively omitting and including elements to suit their preferred choice," Wood said in a statement to council July 19. "The differences in cost are relatively minor when based on appropriate construction estimates and land appraisals. They are insignificant when the province's decision to have the private contractor finance the cost of the project and bill the province over the 25-year term of the contract. According to District estimates, the additional costs to be borne by B.C. taxpayers could be in the hundreds of millions of dollars."
West Vancouver has commenced legal action to overturn the federal government's environmental screening decision, asked the province's Auditor General to look at the business case for the P3 and in particular, the financing aspect, complained to the Ombudsman about the province's conduct in the process and has requested a meeting with Premier Gordon Campbell.
Partnerships BC is looking at three bids from consortiums for the DBFO contract, which is worth $400 million over 25 years.
Another $200 million from the sale of BC Rail's operations will fund the first phase of the $600-million project, B.C.'s finance announced as part of the government's 2004-2005 budget in February.
Three qualified proponent teams have been short-listed to participate in the request for proposal (RFP) stage of the competitive selection process to design, build, finance, and operate (DBFO) the improvements to Sea-to-Sky Highway. The three short-listed teams are: Black Tusk Highway Group, S2S Transportation Group and Sound Highway Development Consortium. The RFP is expected to go out this month, with contracts to be let in the first quarter of 2005. Construction of the highway must be complete by 2009.
The three consortiums are each composed of several companies, with a total of 32 involved - 13 of which have their headquarters outside Canada.
Sonja Lebans, acting mayor for the District of Squamish, confirmed that council has been given a presentation on the P3 proposal by the Project team. However, council has not taken an official position or expressed any concerns about P3s or the rest of the project.
Council will have an opportunity to comment on the section of Hwy. 99 through urban Squamish and as far south as Britannia Beach.
Lebans did point out that the 1-km test section of the highway south of Lions Bay, which is being used as a model for the main contract, came in $1 million under its $10-million budget.
"It was a win-win for both sides," said Lebans. "The government gets half back and so does the guy doing the construction. That kind of thing worked well and those are, I think, the kinds of proposals they put out."
The Squamish and District Labour Committee (SDLC), however, is opposed to the P3 aspects of the project.
"In general, we don't believe the P3s are good because of the increased cost to the taxpayer and the citizens retain the risk while the private company benefits," said SDLC president Lyle Fenton. "It's a funny way to sell privatization of highways to people in this case."
The SDLC is concerned about the maintenance of the highway under a P3 agreement, particularly under a fixed-cost contract.
"How do you hold them accountable? Who's out there checking that the standards are kept? Are we going to see a decline in maintenance or a highway built with 25-year life expectancy instead of long-term maintenance? I don't know."
The SDLC is also concerned that if a multinational corporation is part of the successful consortium, international trade agreements like the WTO may make it impossible for the province to back out of the agreement in the future.
"This is more long-term than people think," said Fenton. "This is a removal of democracy of sorts."
