Superhospital public-private partnerships are costlier than ever.

February 13, 2018

The amount they’re asking for is way, way, way over what is justified … We, as a government, will not pay one dollar more than what was justified.” Gaétan Barrette, April 1, 2016.

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Quebec’s health minister, notorious for his tough talk and his tight grip on hospital finances, was adamant he would not yield to the private consortium suing the government for $330 million.

Led by engineering firm SNC-Lavalin, the consortium claimed it was owed that sum (which it later hiked to $360 million), on top of the $1.3 billion it was to be paid under a contract to build the superhospitalof the McGill University Health Centre. The contract — known as a public-private partnership — was supposed to guarantee that any cost overruns would be shouldered by the private partner and not taxpayers.

Yet less than two years later, on Jan. 8, the government announced it reached an out-of-court settlement with the consortium, agreeing to pay it an extra $108 million. That same day, Quebec declared an even bigger payout, $125 million, to settle a dispute with a different consortium that built the nearly $2-billion CHUM superhospital.

What the government did not reveal that day is that it concluded yet another financial settlement arising from the $939-million expansion of Sainte-Justine Hospital. That project was not built as a public-private partnership, and instead the government assumed the full risk of all cost overruns.

So what was the amount of that settlement? No more than $9 million, the Montreal Gazette has learned.

The irony of the settlements — a staggering total of $233 million for the private consortia tasked with keeping a lid on costs compared with a $9-million hit for the government in a project in which it took the full risk — is not lost on critics of public-private partnerships.

“Despite cost overruns, the government maintains better control over (construction) projects than the private consortia,” said Guillaume Hébert, an expert in public-private partnerships (PPPs).

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