CCPA report outlines the implications of P3-giant Carillion’s collapse on Manitoba’s economy
January 24, 2018 at 5:50 PM
Today, the Canadian Centre for Policy Alternatives (CCPA) Manitoba, released a report about the Collapse of P3 Giant Carillion and its impact on Manitoba's economy.
Carillion collapsed when it failed to meet its huge debt commitments, accumulated as a result of Carillion’s over expansion of its P3 ventures. The UK government has had to take over Carillion’s responsibilities, and is now scrambling to feed school children, care for hospital patients, and make sure that prisons remain staffed and that roads are maintained.
Carillion Canada is the private partner in many P3s across Canada, with over Ca$1 billion in annual revenue. It remains to be seen how the liquidation will play out in Canada, but if the stability of the Canadian operations becomes questionable, the provincial and territorial governments involved (Ontario, Alberta, Saskatchewan, NWT) will have to be prepared to step in to ensure services are not discontinued, particularly where health care services are concerned.
Loxley claims that one thing is for sure: “until the future of Carillion’s Canadian operations are clarified, workers will worry about their jobs, incomes and pensions.”
In Manitoba Carillion, through its purchase of BC company Rokstad, was awarded a $200 million contract by Manitoba Hydro to work on the Bi Pole III transmission line. Rokstad’s sub-standard performance has increased the risk that the project will not be completed on time and Hydro is now closely monitoring its work to reduce further risk.
The report concludes that the Carillion collapse shows unambiguously that ultimately government is on the line for risk. It is time to cease using P3s and bring infrastructure building and maintenance back into the public sector.