Report finds privatizing wastewater in Regina will cost $61 million more than keeping it public

In a report released earlier this month, economist Hugh Mackenzie calculates the cost of Regina’s public-private partnership (P3) wastewater scheme to be $61 million more than if the city were to build it publicly.

According to the report, Flushing Money Away: Why the privatization of the Wastewater Treatment Plant is a bad Idea, higher private sector borrowing costs will significantly inflate the overall price tag of the P3 privatization project.

In addition, the report notes that the City of Regina faces difficulty quantifying the true costs associated with the P3 scheme’s transfer of facility control over to a private, for-profit operator under a proposed three-decade long contract. Privatization of the wastewater treatment plant would see the public providing the bulk of capital towards the project, yet the operating rights would be handed over to a private firm that would contribute only 40 per cent of overall capital towards the project.

“Strictly on the economics of this, the conclusion that I’ve come to is that it simply doesn’t make any sense,” Mackenzie said speaking via Skype during the news conference hosted by Regina Water Watch for the report release. “The economics of the P3 option do not hold up.”

The report also concludes that even with the P3-tied federal government funds, the privatization project would still cost Regina residents more – up to $13 million more than the entire value of the expected Federal grant.

Regina’s City Council voted in February to proceed with a P3 for the new wastewater treatment plant.  Regina Water Watch – a community coalition concerned about the privatization of Regina’s water and wastewater – is currently collecting signatures on a petition calling for a public referendum so that residents have a say in whether Regina’s wastewater treatment is privatized or remains in public hands.
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