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Laila Yuile

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Bait And Switch Toll Reduction Won't Help B.C. Liberals

Posted: 09/12/2012 5:30 pm

The Port Mann Bridge project has been steeped in controversy from its humble beginnings as an economically prudent plan to twin the existing bridge at a cost of $1.5 billion to what we've ended up with today: a completely new bridge and highway project totaling $3.3 billion financed through tolls.

Wednesday's announcement by newbie B.C. Transportation Minister Mary Polak that the tolls on the Port Mann will be reduced for a period of time with incentives -- call now and the next five people get a free Shamwow -- is no less controversial than the project itself for one very good reason.

Mary Polak is of course a Liberal MLA in Langley facing an election in 2013, along with MLA Rich Coleman and likely Surrey MLA Stephanie Cadieux. Each has confirmed they intend to run again to the press and it's very apparent to everyone (except Mike Klassen apparently) that the Liberal brand has been all but blown up by the disingenuous Christy Clark. Quite frankly, these MLAs are going to need every bit of help they can get.

The question is, will a reduction in tolls make any difference at all to hardened voters weary of the endless stream of politicking from Clark, the second most unpopular premier in Canada? I don't think so, and this is why. The Liberals are using the old bait and switch trick, one they've perfected over the last 10 years. Sure we get a discount at first, but eventually we're all going to be paying -- for the rest of our lives quite frankly.

To those of us who travel the bridge, it had been clear for years something needed to be done to address the gridlock on both ends. Public transportation south of the Fraser is horrific during the week and nearly non-existent in some areas on the weekend, making vehicles mandatory for most.

So back in 2008, with the process to twin the existing Port Mann Bridge well underway, a preferred bidder was selected and negotiations began between the province and the winning consortium.

However, in January of 2009, it was revealed that Macquarie, part of the consortium selected to handle the project, was having troubles getting financing in the increasingly unstable economic conditions being felt worldwide. This was the very first sign of trouble on the horizon.

Shortly thereafter, then premier Gordon Campbell and Transportation Minister Kevin Falcon announced the private partners didn't want to pour money into maintaining the current Port Mann Bridge and lo and behold, a grand new plan appeared to build an entirely new bridge and highway upgrade at the new inflated cost of $3.3 billion. Most interesting was the development that the province was going to take on financing one-third of the bridge themselves, another definitive sign something big was amiss.

Once again, it wasn't long before Falcon called yet another press conference, this time announcing that even Macquarie, the Liberals' best offshore advisors, could not secure finance terms that suited Partnerships BC, and the P3 partnership was called off.

In a reversal remembered by many, Falcon, who had earlier announced with great conviction that the P3 model was best deal for this project and taxpayers, suddenly announced that the government would be financing the entire project themselves, via a traditional fixed price contract.

Ironically, he also pointed out that this was a better deal for taxpayers because government could borrow money at a far better rate than any private partner could and while Kiewit/Flatiron would remain as builders, Macquarie was also being kept on in an "advisory role."

The design build contract was never put back out to tender, a move criticized by many in the industry as unfair and irregular. No questions were answered to why Macquarie was being kept as advisers or how much they were paid, both facts that remain obscured to this day.

Even worse, while politicians have repeatedly stated this is a "fixed price contract," contract documents reveal many clauses and indemnities that call into question the true cost of the project.

Now please, I know it's hard, but try, if you can, to ignore the fact the government is tearing down a perfectly sound bridge with many years of life left, at the cost of $39 million dollars.

Try to ignore the fact that this project actually started out with a $1.5 billion price-tag for the very feasible solution of the twinned version.

Now try really hard to forget that when the grace period is over, when that year-long discount is over, you are going to be paying to cross that bridge for the next 40 years of your life.

Oh, you can't ignore that? Neither can I. I'll be in my 80s when the tolls come off -- if I live that long!

That's why this old bait and switch, "discounts now, pay later" fallacious politicking won't make a damn difference to the voters in 2013. Indeed, the entire project has been included as part of Falcon's legacy to this province during his tenure in the transportation ministry.

Unfortunately it's a legacy that if anything, only highlights the need for a cohesive regional strategy -- and government -- that is transparent and equitable, not punitive and narrow sighted.

The underwhelming "success" of the Golden Ears Bridge is proof in the pudding.

 

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11:22 PM on 09/13/2012
Great article Laila. Most people don't know that they are tearing down the old bridge. Isn't that a crime? Destroying public property? Someone could file an injunction against the government pretty easily I think. I personally don't care if the new bridge never gets used. How can people be so gullible to fall for that old argument about the government having no money so you have to pay for rest of your life? Yet, somehow they came up with the money up front? But they don't have it. As thought there is any accountability in government bookkeeping. Maybe they could just put a bucket out in front of every house and say, throw your money in here, the BC government needs the money. That is about how much sense toll bridges make in a system that collects TAXES for this kind of thing. It would be great if that were the end of the argument, BUT no, adding insult to injury, the government is spending 39 million dollars to TEAR DOWN A PERFECTLY WORKING paid for bridge! Upside Down World! If this project doesn't typify the corruption and excess of BC politics I don't know what does. It is a stupefying international shame that this is happening right now in British Columbia, Canada, supposedly the richest country in the world.
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Laila Yuile
10:35 AM on 09/14/2012
Indeed, it is also important.. and right now I think very pertinent... to understand how much government relies on the private sector for advice - something I firmly believe needs to change. In fact, the news yesterday of the natural gas estimates being way off is a case in point. Because most ministries dont have employees who are highly experienced in key areas, the government constantly hires private sector consultants... often from the same companies they do business with or companies that have current contracts with them. Of course, in the transportation ministry, the ministry staff and TIC staff are often advised by people from Kiewit, or SNC Lavelin, or Macquarie.... even though these companies have current contracts or obligations with the ministry or others. One has to wonder how often the information passed onto the government is skewed in favour of the private contractor who stands to benefit most. If I were in charge of this kind of thing, I would have twinned the bridge and upgraded portions of the highway and pushed through light rail from the valley, an economical option the government seems to try very hard to ignore... simply because, in my opinion, it is not allow for obese contracts to be given to their corporate supporters in the private sector.
01:17 PM on 09/13/2012
We have written two posts at our blog on the topic of BC Debt. It's surprising that the BC Liberals, whether under the leadership of Gordon Campbell or Christy Clark, haven't been telling the truth about how all their infrastructure spending will be magically gone, balanced books, by 2013, IF they are re-elected for a fourth mandate in..... 2013.

A former Minister of Finance claimed that the HST wasn't on his Radar. Perhaps another former Finance minister bailed out just last month, Kevin Falcon, because he knew that in the ensuing years, to be precise here, in 2014 the BC government debt will sky rocket in 2014 which will any government elected in 2013 financially strapped until 2022. http://blogborgcollective.blogspot.ca/2012/09/port-mann-bridge-tolls-and-hst.html
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Laila Yuile
10:14 AM on 09/14/2012
Great post Dallan.... aka North Van Grumps for those who are a bit confused by the Dallan handle. It's important for people to realise that any new government is walking into a real tight situation and that there is not going to be any quick turnaround... for years as this graph points out. Certainly there are places to cut - there are a number of corporate credits that could be cut back without risking a loss of business and I am a big supporter of increasing personal tax for higher income earners who most often have credits or write-offs to offset the increase regardless. The liberals cut back taxes significantly in the last 10 years and never made up for the ensuing loss of revenue those taxes generated. I have a great post on my site right now detailing this.
09:34 PM on 09/12/2012
Bang on Laila!
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Laila Yuile
02:18 PM on 09/13/2012
Thank you Gabi. It's been fun to watch the finance minister this morning admit... after yesterdays lies from Transportation minister that they did the math, everything works, not to worry..... that this cut actually impacts the budget by $108 million over the next three years!!

I can't understand why this government is so adept at telling half truths and outright lies. Really, it's appalling. For those of us who have read the books of the Transportation Investment Corporation, the crown corp that was created to handle this project, it was immediately apparent this reduction was going to come at the cost of something else. Sad that the government doesnt give the people the respect they deserve. Today we find out with their financial updates, that extensives cuts are needed to reach their deficit targets...