The Sarnia Hospital is in the news. A P3 project designed to save the taxpayers money, it has been hit with huge cost overruns. Guess what? No matter what Premier Dalton McGuinty tells you about the risk of overruns being taken by the private partners, the fact is that the costs are going to be borne by the taxpayers. Indeed, the increased cost paid by us is likely designed into the contract at the outset, protecting the private partners from an overruns.
I know because I've been studying a bond offering to pay for another P3 contract, the Durham Region Courthouse.
We'll be paying a half-billion dollars over 30 years to pay for a 5% bond offered up by the private partners to pay for the courthouse. The Ontario government can raise funds on the bond market at 3% to 4% interest.
You do the math.
[Actually, I should do the math more carefully myself. This piece was originally titled "half-trillion" instead of the correct "half-billion", and the mistake was repeated in one place in the text. If the link you are following still says "trillion", I apologize. In any case, the feed has been republished, and the correction should propagate out to any links using the feed.]
Read more...
No comments:
Post a Comment