Normally it is the departee receiving the gift. But the practice was reversed this week when Nova Scotia\u2019s auditor general delivered his final report to our missing in action legislature. Michael Pickup, who is leaving after five years to take the same job in British Columbia, bequeathed the McNeil government a thumb\u2019s-up on its plan to use the widely discredited P3 approach to replacing the Victoria General hospital.<\/p>\n
While it was far from an enthusiastic endorsement, Pickup\u2019s headline conclusion – that the public private partnership model was selected \u201cbased on a reasonable and appropriate business case\u201d – will come in handy for fending off their critics as the Liberals blunder ahead with their $2 billon (so far) plan to replace the VG with an avalanche of bricks and mortar.<\/p>\n
There\u2019s a certain irony in Pickup handing a political gift to the Liberals on the health file on his way out the door. His proclivity for scaremongering and straying into political territory over Nova Scotia\u2019s fiscal situation may have been helpful to McNeil\u2019s austerity agenda. But, as described here<\/a>,<\/strong> he and McNeil had a public tiff in 2017 after one of Pickup\u2019s reports found fault with McNeil\u2019s handling of the perceived shortage of family doctors.<\/p>\n The Premier, showing a flash of the petulance that has lately become his hallmark, said if Pickup didn\u2019t like what the government was doing, he should run for the office. But Pickup held his ground, pointing out that he had every legal right to review the government record on health care delivery. \u201cI\u2019m 150 per cent comfortable that the work we\u2019re doing lies within the mandate of the office of the auditor general,\u201d he said at the time. Even McNeil couldn\u2019t top 150 per cent certainty.<\/p>\n Lukewarm endorsement<\/strong><\/p>\n The AG\u2019s parting kiss-and-makeup P3 gift came nicely wrapped in \u201creasonable\u201d and \u201cappropriate,\u201d but when you open the box and look inside there\u2019s not much there. Pickup didn\u2019t pass judgment on the actual plan, which is controversial – questionable land purchases, misbegotten parking garages and professional infighting about what cancer care facilities should go where.<\/p>\n His 36-page report<\/a> <\/strong>is limited to auditing the \u201cprocesses used to select a project delivery model.\u201d He found that the government \u201cthoroughly assessed possible project delivery options\u201d and \u201ccompleted comprehensive financial analysis to compare costs and risks of a traditional project delivery approach to P3.\u201d But Pickup did not include any details of the analysis, and his backing of the P3 seems very iffy.<\/p>\n There are a couple of paragraphs (1.10 and 1.11) in the report where the speculative nature of the endorsement stands out. To paraphrase, 1.10 acknowledges that the up-front project costs of P3 are higher, but over the long-term P3 can <\/em>deliver greater value due to the concept of risk transfer. P3 could <\/em>allow the province to transfer to a private partner the risk of delay or cost overrun.<\/p>\n But, as paragraph 1.11 states, that depends \u201con government negotiating a strong contract to achieve the desired risk transfer and providing appropriate oversight throughout the contract to enforce terms.\u201d (On the oversight issue, the report reveals that the government has been falling down on the job so far failing to \u201cmaintain appropriate documentation of its oversight of the consultant that completed the Business Case.\u201d)<\/p>\n To sum up, the benefits are speculative and will require tough negotiating and consistent oversight to achieve. But the higher up-front costs of P3 are a fact.The A-G\u2019s report is therefor unlikely to change the minds of those opposed to P3 schemes. But it made news because over the years auditors-general have usually panned P3 ventures as costly and inefficient. By departing from the consensus, Pickup handed the government a feather it can stick in its cap.[1]<\/a><\/p>\n Internet troubles<\/strong><\/p>\n The same cannot be said for a different type of public private partnership that popped up in the news this week – a snag in the ongoing and expensive effort by the provincial government to work with the telecommunications industry to expand its high-speed internet service into rural areas.<\/p>\n In another unexpected twist, musician J.P. Cormier gave two months notice of a class action suit against the province over its failure to provide high-speed internet to the people of rural Nova Scotia. Cormier told media that \u201catrocious\u201d service is jeopardizing his ability to make a living from his home and studio in the Musquodoboit Valley community of Cooks Brook.<\/p>\n