A new report says a public-private partnership (P3) approach to build the Regina bypass will save taxpayers $380 million.
Ernst & Young, the independent financial and procurement experts, write that the 34-year P3 contract the government has entered into will save “a little more than 16 per cent over the traditional model”.
The traditional model is the design-bid-build procurement typically used by governments which in the case of the bypass would total $2.2 billion. That compares to the P3 deal the government struck with consortium group Regina Bypass Partners that amounts to $1.88 million.
The report takes into account all costs associated with construction, operations, maintenance and risks that could be associated with building the largest infrastructure project undertaken in Saskatchewan.
In a news conference held at the legislative building Tuesday, the government maintains the bypass will be cheaper and built faster as a result of using a P3.
“Where P3s makes sense, where they deliver value to the taxpayer we are going to consider them as an option,” SaskBuilds Minister Gordon Wyant said. “We want projects delivered on time and on budget and we know from history that traditional projects have delays associated with them.”
Wyant adds any risk, like delays or cost overruns, are the responsibility of the private sector not the taxpayer.
The NDP doesn’t trust the numbers associated with the Regina bypass project.
Trent Wotherspoon is skeptical.
“Auditors in other jurisdictions have weighed in after we’ve heard of the same sorts of value for money reports brought forward by proponents and governments, like we see here and have found those numbers to be inflated, untrustworthy, largely bogus.”
The NDP wants an independent audit to look at bypass deal.
“We have to remember that taxpayers are ultimately on the hook for this deal for over 30 years,” Wotherspoon said. “We have one chance to get it right.”
The private sector would largely responsible for delays and cost overruns associated with P3s.
Shantel Lipp, president of the Heavy Construction Association, says those risks are manageable.
“It comes down to scheduling, it comes down to sourcing materials, it comes down to look at their labour resources.”
Lipp believes when the private sector has money invested for the duration of the project, in this case over 30 years, there is incentive to get the job done on time and on budget.
“They have to be innovative,” she said. “Managing their dollars better, sourcing their materials, using different types of materials more efficiently and effectively to build this project.”