EPC votes on provincial requirement to consider private-public partnership to fund sewage plant upgrades

WINNIPEG — The City of Winnipeg says it is being required by the Manitoba government to consider a private-public partnership to complete upgrades to the North End Sewage Treatment Plant in order for the province to support its application for federal funding to help pay for the project.

The Executive Policy Committee voted Tuesday on a recommendation by the public service for the city to enter into single source negotiations with Deloitte LLP to conduct a market analysis for a P3 at a cost of $400, 000.

“The Public Service recently received confirmation that the Province of Manitoba requires the City of Winnipeg to test the feasibility of a Design Build Finance Operate Maintain (DBFOM), which is the most complex P3 model whereby the private sector is responsible for the capital upgrades, the operations of the facility for a specified period of time (often 30 years), as well as sharing in the financing of the project between the public and private sector,” Moira Geer, director of the city’s water and waste department, wrote in a report to council.

“The public service, with the assistance of external consultants, has advised the province this is not a feasible solution, but the city has still been directed by the province to test the market.”

Total cost of the sewage plant project is pegged at $1.8 billion.

EPC voted in favour of an amended recommendation made by Coun. Scott Gillingham to approve the market analysis with a catch – that it not include operations or maintenance of Winnipeg’s sewage system.

Mayor Brian Bowman and councillors Gillingham, Brian Mayes and Jeff Browaty voted in favour, councillors Matt Allard, Cindy Gilroy and Sherri Rollins opposed.

Some city councillors and Bowman are concerned about the operations and maintenance component of the P3.

“The idea of the operating and maintaining by the private sector, for not just that plant but because of the connectivity of our sewage treatment capacity it’s effectively our entire sewage treatment capacity, is not one that I would support,” Bowman said Tuesday during a media availability.

“This is a request for nearly $400 million of support from other levels of government to support a critical piece of infrastructure for the protection of our lakes but also for the support of growth in our city and to meet our licensing requirement under the provincial government’s requirements.”

The union representing workers in the city’s water and waste department is worried about layoffs if the private sector assumes of responsibilities operations of the city’s sewage system.

“That’s why on Friday, when our members received notice that their work was on its way to being privatized it was devastating to many of them,” said Madelaine Dwyer, water and waste unit president with CUPE Local 500.

Geer told council the public service doesn’t support private sector operations.

“This type of P3 would essentially be privatization of the entire sewage treatment system in the City of Winnipeg,” Geer said in the report.

She told councillors consultants have previously suggested to the city look only at a private-public partnership to fund the capital upgrades – the design, build and finance components of a P3 – but not the operations and maintenance aspects of the partnership.

Bowman said he thinks a market sounding for the design, build and the financing portions of the project would be a better way to proceed.

Manitoba’s Central Service Minister Reg Helwer said the province is awaiting guidance from the city on the best way to upgrade the facility.

It remains to be seen if the provincial government will accept the city’s latest position but Helwer offered no guarantees.

Asked if the province would support EPC’s decision to conduct a market analysis without including operations and maintenance, Helwer said it should be left to the marketplace to determine.

“We’ll look at what the options are there and to limit options I don’t think are in the best interest of Manitobans, Winnipeggers or taxpayers,” Helwer said Tuesday. “Let’s go find out what the options are.”  

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