On the same day that Dalton McGuinty government handed the Durham Region Courthouse project to Access Justice Durham (March 2, 2007), the Australian investment firm of Babcock & Brown bought 100% equity in AJD.
Now be clear on this. The courthouse is going to cost $214 million, assuming no overruns. To gain 100% control though, BBPP only had to invest $15 million, since in this "partnership" the private side is only putting up enough equity to cover 6% of the cost of the project. The Ontario government (meaning us taxpayers) will be footing the bill for a 5.015% bond that is raising the other 94% of the cost.
Still, BBPP is reported over and over again as have 100% equity interest. Technically true, but rarely is it mentioned just how little that actually amounts to in terms of exposure (which can be a measure of just how careful and cost-conscious the project management will be). With this "100%" equity in major overseas projects, BBPP stock goes up and up, no doubt already making the $15 million back and then some.
Meanwhile, the courthouse is still two years from being completed.
You'd think the government partnership agreement would include a requirement for enough equity to be invested that would not so easily be recovered, just to keep the private partners keenly interested in the success of the project.
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