Tag Archives: Infrastructure Ontario mandate

Could it happen here? P3 hospital costs leading to meltdown of health care in the UK

If you wanted to see the future of Ontario’s health care, there used to be a time when you could simply fly to Tony Blair’s Britain and have a look.

Blair couldn’t privatize fast enough, creating more than 200 PFI projects – private finance initiatives – to replace aging infrastructure.

It really was the ‘no money down’ miracle. Hospitals, schools and roads were all built using private money. These facilities would be run by the private consortia for periods typically between 25-30 years, although some for as long as 60 years.

Typically no money down usually translates into whopping high borrowing costs, costs that will have to be paid back some day.

Now the PFI party is over in Britain, the country is experiencing one helluva hangover.

Ontario has initiated more than 30 hospital projects under similar schemes, the most notorious being the William Osler Health System in Brampton. The Osler public-private partnership (P3) has been well documented as a costly blunder. The Ontario Auditor General highlighted almost $400 million in higher costs to develop Osler privately. This does not include the almost doubling of construction costs between the first estimates and the final contract sign off.

P3s are North America’s version of the PFI. In Ontario, just to add to the confusion, these are sometimes also called AFPs – alternative financing and procurement projects.

Like the UK, the more disastrous these deals looked, the more the government kept on signing new private deals.

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