Evaluating value-for-money on a privatized public infrastructure project has always been a bit of a mugs game. A value-for-money (VFM) assessment is produced every time the province engages the private sector in the building of public infrastructure such as hospitals, court houses, or recreation facilities.
The problem with these assessments is they are always done by an organization that has everything to gain by making the assessment support the privatized option. Given these value for money calculations are usually done after the deals are signed, it would be very embarrassing for government to show otherwise.
These assessments were formerly done directly by Infrastructure Ontario (IO), but given IO’s mandate to engage the private sector in such projects, it was felt they failed the test of unbiased independence. A look at the Auditor General of Ontario’s review of one of their earlier projects – the William Osler Health Centre – would suggest IO got quite creative in justifying a project that looks to have cost taxpayers at least $400 million more than had the government taken a more conventional approach to financing and operating the hospital.
After it was acknowledged that perhaps IO wasn’t independent enough, business consultants like KPMG were asked to do this work. Unfortunately these business consultants were also members of the Canadian Council for Public Private Partnerships, and therefore, also subject to criticism of bias. Now a third-party is engaged to evaluate the “fairness” of these evaluations prepared by KPMG and others. These “fairness monitors” are often themselves involved in the world of public-private partnerships, and therefore far from impartial.
