CORNER BROOK — The escalating costs of the water and sewage treatment projects in Corner Brook is the most concerning aspect of what Gabriela Sabau learned Thursday.
The economics and business professor was in attendance for a session by Frank Ohemeng of the School of Political Studies, University of Ottawa in Corner Brook. His talk, “The Politics of Privatization and its Implications for Service Delivery,” delved into the controversial concept of privatizing public services.
She was struck by the amount the water treatment project being estimated to cost Corner Brook has risen in just five years. During the introduction, Sheldon Peddle informed the audience the water and sewage treatment project could cost the city more than $100 million. Late last year, when the city decided to take a new approach to the design and construction of the proposed water treatment plant to hopefully save money, it alone had ballooned to more than $60 million.
Sabau said she does not think the privatization of water distribution is a feasible issue in Corner Brook, but she says it is time these major infrastructure projects get done.
“It is just atrocious,” she said. “The more we wait, the higher the cost is going to be and the higher the price is going to be. We shouldn’t be waiting, and I don’t know why we are waiting so long to do this.”
The professor said the entire cost of these major projects cannot just fall to provincial and federal governments, that people have to be willing to incur increased taxes or levies to pay for these higher-quality mandatory services.
Where she thinks privatization has the biggest impact is the contracting out of infrastructure work and maintenance, just not in the delivery of the service. She said there is no, and cannot be, a competition here for the delivery of water.
However, she does say there must be a change in mentality of people toward water. A survey of Corner Brook, conducted by her and some students, approximately five years ago, showed 75 per cent of the people buy bottled water or pay for filtered water.
“They were not happy with the quality of water, and were willing to pay more for having a system of purification in place and having really clean water from the tap,” she said.
Sabau said people have a supply approach to the distribution of water, leading to the wastage of the resource. She proposes a demand approach, where people are aware of their water usage and the cost to them.
No one size fits all
Meanwhile, Ohemeng said there is no one size fits all answer to whether privatization will be effective and efficient for public assets.
“What may be good in one sector or one policy area, may not necessarily be good in another policy area,” he said. “What may be bad in one policy area, may not necessarily be bad in another policy area.”
He said it is important for politicians and bureaucrats to examine each case on its own merit, and make their own decisions on whether to privatize a public asset or not.
“I am not going to argue that privatization is simply bad because I found one case or two or three cases that makes it bad,” he said. “Neither am I going to say privatization is good because in some cases it worked that way.”
Ohemeng said there is a different understanding of what privatization is in some parts of the world as opposed to North America. Here, it is not just the sale of public assets, but also includes the broader spectrum of private/public partnerships, divestitures and contracting out.
Among other things, he said privatization is sometimes portrayed as a way to eliminate the perception of an ineffective or inefficient bureaucratic workforce and possibly the idea of loose money spending. It can also help eliminate potential corruption that exists within the political system, he said.
However, he also warned that is not always the case. He said there are still examples of corruption within the private sector, and he cautioned against perceived savings or hidden costs associated with the selling of public assets.
“All that glitters is not gold,” he said.
