Approaching $1 Billion in Cost Overruns at Privatized P3 Hospitals: Coalition Demands Audit, Moratorium on P3 Privatization



    TORONTO, Oct. 5 /CNW Telbec/ - The P3 privatization of Ontario's
hospitals exploded into the election campaign with yesterday's announcement
that the new Sarnia hospital will cost $214 million, more than 50 per cent
more than the projected cost of $140 million. This puts the total cost
overruns for Ontario's privatized P3 hospitals climbing towards $1 billion.
Every one of the privatized P3 hospitals is late by months or even years.
    The Ontario Health Coalition (OHC) is calling for McGuinty to promise a
moratorium on all P3 privatization until the signed deals have been audited by
the provincial auditor.

    Cost overruns to date:

    (All costs the most conservative figures. We have used capital costs
    alone, excluding interest, service privatization and equipment deals.
    With those additional costs calculated in, the privatized P3 costs are
    much higher.)

    
    -------------------------------------------------------------------------
    Community     Projected Costs            Final Costs        Cost Overrun
                                     (After Negotiations
                                          Concluded with
                                   For-Profit Consortium)
    -------------------------------------------------------------------------
    Brampton         $350 million           $650 million        $300 million
    -------------------------------------------------------------------------
    North Bay        $218 million           $551 million        $333 million
    -------------------------------------------------------------------------
    Royal Ottawa     $100 million           $146 million         $46 million
    -------------------------------------------------------------------------
    Sarnia           $140 million           $214 million         $74 million
    -------------------------------------------------------------------------
    Sault
    Ste. Marie       $200 million           $408 million        $208 million
    -------------------------------------------------------------------------
    

    TOTAL IN COST OVERRUNS ON CAPITAL ALONE: $961 million

    Current estimates for the P3 hospital projects out for tender in
St. Catharines and Woodstock are still secret.
    "This has to be Dalton McGuinty's most expensive broken promise from the
last election," said Dora Jeffries, OHC co-chair. "The whole justification for
privatization was that P3s supposedly came in 'on time' and 'in budget'. But
every single privatized P3 hospital is vastly over budget and every single one
is late."
    "The privatized P3 hospital policy is now proven to be a house of cards.
While it has enriched a host of well-connected business interests, it has no
underlying financial justification and it runs counter to the public
interest," Jeffries said.
    "The McGuinty government has engaged in an inexcusable level of secrecy
and obfuscation every step of the way," noted Natalie Mehra, OHC director.
"McGuinty has managed to keep secret all financial details of the deals in
Sault Ste. Marie, Sarnia, North Bay, St. Catharines and Ottawa until after
this provincial election. Despite major media attention, McGuinty has never
explained why the cost increases have been so massive in every town."
    "Every McGuinty candidate and MPP is repeating the script that these
hospitals are public, to obscure the level of new privatization introduced by
his government," Mehra said. "The government has actually paid consulting
firms to conduct essentially fake 'Value for Money' comparisons in which none
of the government's figures are actually tested, and is now claiming that
these are audits. In fact, the provincial auditor has not looked at a single
one of these privatized P3 deals and no independent party has tested the
government's figures."
    "If there's nothing to hide, then Dalton McGuinty should not have any
problem with a public audit and full public disclosure about the cost
overruns," Jeffries said. "In fact, in the interests of sound governance and
public accountability the P3 privatization policy must be revisited and
subject to a full review before any more deals are signed."
    In St. Catharines, Sarnia and Sault Ste. Marie, more than 18,000 people
have signed pledge forms to make the P3 privatization of their hospitals a key
election issue. More than 300 doctors and nurses have sent letters to McGuinty
to ask him to stop the P3 hospitals. Over 80,000 Ontarians have voted against
P3 privatization of their local hospitals in community plebiscites.




For further information:

For further information: Ontario Health Coalition, (416) 230-6402
(cell)

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