Canada study questions P3s value

Left-leaning thinktank the Canadian Centre for Policy Alternatives has suggested the value for money (VfM) tests used in Canadian projects are “biased” in favor of P3s.

Left-leaning thinktank the Canadian Centre for Policy Alternatives has suggested the value for money (VfM) tests used in western Canadian projects are “biased” in favor of P3s.

The report looked at 47 VfM reports that analyzed the suitability of P3s across Canada, and found 98% of tests recommended P3s. The thinktank suggested that VfM tests are “too often used to justify government decisions after they have already been made”.

Pointing at risk transfer and payment discount rate calculations as elements that “tip the scales” in favor of P3, the report says that “only when the estimated value of retained risk is factored in that the VfM comparison favors the P3 model”.

The author does note that P3s are generally selected for large scale and complicated projects, and so studies are often reserved for projects that fit the other criteria of infrastructure model selection.

The full report can be found by clicking here.