The Livable Blog

Doug McArthur of SFU's Policy Centre explains how the BC Liberals Premier has endorsed failed Danish Policy.

"Danish Investigate Policy Copied by Campbell" (BC Liberals)

The Vancouver Sun profiled Premier Gordon Campbell on Friday in Denmark endorsing not the Copenhagen Accord, but the Danish policy of subsidizing private wind power at the expense of taxpayers. He claimed that Denmark sets an example for us if we want to develop clean energy. And indeed it appears that his government has been in many ways following the Danish example. Unfortunately, neither he nor his advisers appears to have taken the time to discover how wrong the Danish approach has turned out to be and how costly it will be to Danish taxpayers.../snip

snip/...Meanwhile, it is perhaps worth noting that on the very week that Campbell profiled the Danish program, investigators in Denmark commenced a corruption investigation into the arrangement there. Perhaps a closer look at what is happening here in BC is warranted after all. Especially since the BC program is almost a total replica of that of Denmark.

More evidence that perseverance and grassroots organizing pays off. Congratulations to the Council of Canadians and particularly Paul Manly from Nanaimo who contributed so much to the campaign!

The SPP was about facilitating trade at the expense of the environment and human rights, goals rather like the federal Gateway strategy.

The SPP is dead, so where's the champagne?

By Stuart Trew | August 19, 2009

"The Security and Prosperity Partnership of North America (SPP) is no longer an active initiative and as such this website will act as an archive for SPP documents. There will not be any updates to this site." - Disclaimer from the U.S. government's SPP website.

In October 2007, Globe and Mail reporter John Ibbitson predicted that a then two-year-old effort to deepen and expand NAFTA called the Security and Prosperity Partnership (SPP) would die unless North American leaders put some backbone into it.

Too much of the discussion was happening behind closed doors, wrote Ibbitson, himself a big supporter of the SPP and one of the only journalists to ever write about it in the Canadian media. "If you're going to negotiate freer trade," he said, "sing it from the rooftops.

Keep the media informed. Make it a Big Deal."

Well governments didn't sing (or not loudly enough), barely informed the media, and it fell to alter-globalization and social justice movements in Canada, Mexico and the United States, including the Council of Canadians, to highlight its many flaws. As a result, the NAFTA-plus agenda died in Guadalajara, Mexico last week. We killed it. And we should be singing it from the rooftops.

[snip]

It's time to regroup and rethink, for sure. But please let's do it with a bottle of champagne -- even if it's one from the cheap shelf.

The SPP is dead and we killed it.

Let's recognize what we have achieved and then get back to work.

Stuart Trew is trade campaigner for the Council of Canadians.

Full text at http://www.rabble.ca/news/2009/08/spp-dead-so-wheres-champagne

The University of Greenwich Business School has published a startling report on the crisis in Private Public Partnerships (P3s), which in the UK are more accurately described as Private Finance Initiatives (PFIs).

The long and short of it is that in the present economic situation PFIs just don't make any economic sense because governments can now borrow money much cheaper than private corporations. In addition, many previous PFI toll freeway schemes are unraveling.

This has major implications for the province's freeways expansion schemes (the Port Mann has already reverted to public finance and ownership), but much more for the private power industry. It no longer makes any economic sense at all to go to the PFI/IPP(Independant Power Producer) model. It always cost more to use private financing, but not it costs WAY more.

But crooked politicians never let the business case stand in the way of their friends dipping into the public purse.

(Thanks to Susan Jones for pointing this report out!)

Crisis and public services note 2. January 2009.

A crisis for public-private partnerships (PPPs)?

January 2009

David Hall

Andy Rose, the executive director of the UK’s PFI unit, said in November 2008 that PFI projects can no longer rely on their previous method of raising bond finance, and are now dependent on bank loans which are only available at much worse terms:
“the bond market, which has been the financial structure of choice for large PFI projects over the past 10 years, is now effectively closed to new transactions. This has increased reliance on the banking market…and increased the strain on the project finance banking model…….funding availability is limited and credit margins have moved up… many banks are indicating that the tenor of loans might be shorter.”

John Tizard, the director of the new Centre for Public Service Partnerships at Birmingham University, says that this has already halted finance for PFI schemes and may make them unattractive for the foreseeable future:
“At the time of writing, there is no – or next to no – capital available to finance any PFI deal that has not already been closed.”

[snip]

Tizard suggests that the obvious response is to revert to traditional government borrowing, which is in any case cheaper:
“If the cost of capital and/or debt increases or becomes more difficult to secure, the value for money equations, which are undertaken on PFI deals, may tip over against the use of PFI. …In these circumstances, all other things been equal, it might be appropriate to consider financing through models such as the Credit Guarantee Scheme and other forms of funding through government bonds and public finance. Government can borrow more cheaply than the private sector.”

[snip]

Australia has made considerable use of PPPs, especially for road schemes, but a number of projects have not delivered results and the credit squeeze threatens the future. In January 2009 an article in The Australian summarised the position:
“The brutal reality is that most private sector toll operators are a shambles. Most have overinflated their traffic forecasts, financed them with a slice of equity from the public markets, then geared up, and paid investors back their own capital in distributions (which enticed them into the float in the first place). As the debt markets worsen and most listed infrastructure funds have fallen apart, a new model is needed to help finance the estimated $800 billion the country needs to spend on infrastructure in the next decade….. The Infrastructure Partnerships Australia chairman Mark Birrell said that: "Otherwise, we could find that projects simply won't attract a suitable level of interest in the much-changed global economy," he said.”

Construction companies themselves are pointing out the advantages of the traditional model, whereby the government borrows money itself and then invites tenders for simple construction contracts, rather than attempting to construct PPPs in the context of the credit crisis. Mark Binns, the chief executive of a major Australian contractor, Fletcher Construction , told an enquiry in New Zealand:
“If the aim was to bring projects to fruition quickly, making them PPPs would be a retrograde step, as so much time is involved in setting up the legal framework between participants in the project, he said. He also questioned whether private sector funding would be viable in the current credit environment without Government guarantees, which nullified the transfer of risk to the private sector…..Sometimes the benefits of transferring the risk of PPP projects to the private sector were illusory, it said, citing the British Government's bailout of Metronet, the private operator of the London Underground…. if the transfer of risk was not complete, the true benefits of PPPs came down to an analysis of the funding costs, and there was a strong argument that the Government would be better off just raising debt, potentially through infrastructure bonds, to do the project using other traditional methods of contracting.”

The simple alternative is the traditional method of financing public infrastructure - through government borrowing to raise finance, issuing construction contracts, and then operating the facility, whether through direct labour or contractors.

This remains perfectly feasible. Governments are still able to borrow the necessary money: their credit is not affected in the same way as private companies. Traditional procurement is also simpler and quicker than PPPs: attempts to maintain PPPs as a core method of funding risk delaying infrastructure projects. The desired level of infrastructure investment can thus be achieved without any use of PPPs at all.

A recent PSIRU paper contains a detailed discussion of the choice between traditional procurement and PPPs.

Read the full report at http://www.psiru.org/reports/2009-01-crisis-2.doc

Video producer Damien Gillis has another important production for us to read and view:

Save Our Rivers Society is pleased to present this new 8-min video featuring conversations with two of Canada's top fish biologists, Dr. Gordon F. Hartman and Otto Langer - both former senior scientists and managers at the Department of Fisheries and Oceans - on private river power in BC. The two esteemed scientists - both known for standing on principle, even when not convenient - discuss their multiple grave concerns about the ecological risks of the Campbell government's private river power gold rush. They discuss topics from the impacts on fish & wildlife from "run of river" power projects - each concluding that they are categorically not "green" - to addressing our inadequate environmental review process, and the "endless growth paradigm" in our society, in order to become truly sustainable.

Both men have long careers in biology, management, academia and consulting, and have consistently spoken up to save fish. Dr. Hartman was famously one of the "dissident scientists" who blew the whistle on Alcan's flow regimes for its proposed Kemano Completion Project on the Nechako system. He and the other brave scientists were instrumental, along with a few solitary media figures - namely, Rafe Mair and Ben Meisner - in turning the tide of public sentiment against the calamitous KCP, thus saving large numbers of salmon and other species. Otto Langer, similarly, has spoken out in some challenging situations, taking his former employer, DFO, to task for not protecting fish - especially when it comes to salmon farms on BC's coast and gravel extraction from the Fraser. Both of these courageous scientists caution against this "irresponsible and reprehensible" private river power program, which has seen close to 700 of BC's most precious rivers claimed by private companies to make power for the US market.

"It's green alright. Because green is the colour of money." - Dr. Gordon F. Hartman

Rafe Mair & Damien Gillis are attending Plutonic Power's public comment meeting in Campbell River on Monday Feb 2 at the Quinsam Hall (discussion starts at 7PM); They are also holding their own meeting in Courtenay on Feb 3 from 7-9 PM at the Florence Filberg Centre.

Our perceptions as laymen and professionals can differ widely at times, which is why I posted this article. We all know that BC has vast amounts of Hydro electricity and the geo-climatic resources to produce even more. As for tidal power, as a relative layperson I do know that our geography probably would lend itself well to relatively cost efficient installations, despite the fact that the tidal power industry is still in its relative infancy compared to the wind and especially hydro power industries. Wind power is booming across the world right now, despite the "on again-off again" nature of wind. I would have assumed that BC being a coastal and mountainous province with high plateaus it would be a natural for wind power. Recently however, I was speaking to a BC'er who is an installer of large, (300'+) German wind turbines, and when asked why he is doing all his work in the US or Europe his reply was that there is no appetite for wind in BC. Because the renewable power market is simply controlled and driven by hydro projects.

Will BC ever become the Saudi Arabia of renewable energy? Even now the question itself cannot be easily answered.

B.C. Liberals selling out our energy future

Climate and terrain could make us the Saudi Arabia of renewable energy
Ralph Keller, Arthur Caldicott and Jim Abram, Times Colonist
Published: Wednesday, January 28, 2009

There is an energy "gold rush" happening in British Columbia. With our mountainous terrain and wet-coast climate, we are poised to become the world's Saudi Arabia of sustainable energy from a variety of sources including run of river, wind and tidal power.

If fully exploited, these resources could create four times more power than B.C. Hydro currently produces, and give us billions of dollars for provincial coffers. But only if the resource remains a public asset, managed for public benefits.