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Tuesday, March 16, 2010

Bharat Chandramouli's Presentation to the CRD CALWMC

March 10, 2010

I thank the committee for giving the public an opportunity to speak on this very important issue. As a recent visitor to Coast Salish territory, I am happy to see that the greater Victoria region is installing secondary sewage treatment to deal with our ever increasing volumes of waste. As an environmental scientist, I am interested in the future direction of the CRD's water and waste management plans. I am concerned about the possible privatisation of local infrastructure. I want our infrastructure to be locally owned, controlled and operated so accountability and jobs stay within the community. The provision of water and sewage is universally regarded as basic infrastructure where local control is vital. P3s only make sense from a risk management perspective when a government is unable, or not considered trustworthy enough to carry out natural government monopoly functions. I can only hope that our trust in our governments' abilities to perform these basic functions has not eroded this far.

Sewage treatment is a well established and mature field where expertise is easily available, and it meshes well with the water provision infrastructure which is already municipally controlled. It makes little sense to spin the sewage off to a private entity. Costs will increase due to the extra layer of complexity, and due to the returns to the shareholders the companies need to provide. Governments traditionally have lower borrowing costs and superior bargaining abilities. Why waste that kind of power? Upper/middle management jobs may not be available to local people, so there is no jobs benefit or job diversity from privatization. There is lowered accountability as well. While P3s claim to shift risk away from governments, studies show that this risk shifting has not actually worked in practice. Non-local companies can leave if things go wrong, municipalities cannot. Non local companies can declare bankruptcy and shed all accountability if things go wrong, we cannot.

I urge you to look at work produced by Aidan R. Vining of Simon Fraser University and Anthony E. Boardman of the University of British Columbia as a valuable counterpoint to estimates coming out of the Conference Board of Canada and Partnerships BC (see attachment). They find that official cost benefit analyses showing the supposed benefits of P3s are fundamentally flawed because they do not take any of the social costs, transaction costs or externalities into account. They conclude that P3s only work from a financial perspective when they are designed to closely mimic traditional design-build-transfer or build-transfer contracts. Why waste time and effort trying to make this shoe fit when it clearly does not?

When we run the plant, we have the power to be flexible, to optimize the operations and modify them to suit our changing needs. We get to decide how much data we want to release, or what kind of research we want to support, what kind of relationship we have with the local community, and what kind of behavioural changes we would like to encourage to reduce waste. When we run the plant. our success does not depend on any one company's business practice or technology bias. We get to incorporate best practices to operate a sewage treatment facility that works for us, not the other way around. Public ownership is the conservative choice!

In conclusion, I oppose privatisation of the water and sewage infrastructure for the following reasons:

1) Increased costs

2) decreased accountability

3) Loss of job diversity

4) Decreased efficiency due to increased complexity

Thank you very much for your time.

Bharat Chandramouli, Ph. D

Monday, March 15, 2010

Trade, Politics and Global Climate Change

Date: Wed., April 7, 2010
Time: 7:00pm - 9:00pm (doors open at 6:30pm)
Location: Da Vinci Centre
Street: 195 Bay St.
City/Town: Victoria, BC

Are International Trade Agreements undermining efforts to solve Global Climate Change? Can our politicians cooperatively address this issue, by working together across party lines?

The Council of Canadians, Victoria Chapter presents a forum on climate change with the focus on trade agreements and how they affect the environment. We need to address how to create and enforce trade agreements that place environmental sustainability and the lowering of our carbon footprint in the forefront. It is time for our elected officials to cooperate on these issues. In this non-partisan forum we hope to discuss the challenges and the solutions to this most important issue. Microphones will be available for you to speak to this critical situation.

Invited Guests:

Elizabeth May

Dr. Keith Martin MP

Hon. Gary Lunn MP
Denise Savoie MP
Further information: 250-380-7145 or 250-220-5355

Sunday, March 14, 2010

Stuart Hertzog's Presentation to the CRD CALWMC

March 10, 2010

Good evening.

My name is Stuart Hertzog and I spoke to you this morning about the impact of this project on greenhouse gas emissions. I calculate that in 40 years, this project would add 1.6 Megatonnes of CO2e to the global atmosphere. On that basis, this project should not go ahead.

Because it would create environmental and financial problems where none existed before, many people, including myself, are wondering why you have embarked on such an ill-advised path. Perhaps the answer lies in the push by the BC government to privatise public utilities?

There is no doubt my mind and the minds of many others, that this entire project has been mandated by the BC government's desire to privatise municipal sewage services. But the public response you have been receiving points to considerable concern about this. There is strong public support that the CRD's sewage system should be publicly owned and operated.

You are asking the public to choose from a menu of six procurement options, from the public Design Bid Build to the P3 Design Build Operate Maintain. But there is another option that has not been included, which is not to proceed at all with this billion-dollar mega-project. There is considerable public support for that option, too.

This public 'involvement' process is manipulative and meaningless without including "none-of-the-above," which I suggest is the best choice.

Without the option of not proceeding, you are faced with three political solutions to the thorny issue of ownership and procurement: a fully-public system; a hybrid mix of public and private; and a full P3 package.

Because you must somehow assuage the public fear of privatisation, there is no doubt in my own mind that you will favour the politically less-damaging, 'hybrid' solution. That way you can appear to be fair and balanced -- except that this will be the worst possible choice.

This 'hybrid' solution is in fact a P3, in which the heart of this project -- ownership and sale of the revenue-producing streams of biogas and biosolids -- will be moved into private hands, while the costly, non-revenue, supporting infrastructure, will be paid for with public funds.

The devil is hidden in the details. The draft Business Case presented by Ernst & Young last week, recommended that both the West Shore and the Victoria biosolids plants be P3s. I suggest to you that these two plums are of great interest to the private sector.

These two plants will receive the liquid waste streams from the entire Capital Region District. They will dry and process them to produce methane biogas for internal process use, with any surplus for sale to Terasen Gas. The operator will sell the biosolids as cement kiln or municipal waste incinerator fuel. The CRD will be reduced to a supplier of liquid waste at public expense.

It's the perfect money machine. The plant operator is guaranteed a flow of feedstock, which it can process as cheaply as possible. It can then resell its products to the highest bidder, maybe even while being paid to process the sewage -- it all depends on the details of the contract.

Who would own the incoming feedstock? Who would own the biogas and biosolids produced? What about any future carbon credits -- who will own these valuable, tradable assets? These details are vitally important to the regional taxpayer -- but we aren't being asked about those, nor are we likely ever to learn exactly what will be negotiated on our behalf.

Should these two plants be privatised, we know that the financial and operational details of any contract will be hidden from public view on the grounds of commercial secrecy. Yet these contracts could contain minimum and maximum flow requirements that could limit the ability of the CRD to fulfil other policies, such as water use and greenhouse gas reduction.

You are asking the public to choose between just six models of procurement, while the devilish details are hidden in carefully-crafted reports that suggest privatising these two key plants.

That's like Henry Ford saying "you can have any colour car you want -- as long as it's black."

By choosing the hybrid option, you will be still turning over the valuable assets of a municipal service to the private sector, while asking the public to pick up the tab. This doesn't seem right to me, nor to the majority of the voting public in your municipalities.

The decisions you will be making in the next months are crucial, both for the financial stability of the CRD and each for municipality; for public health; and for the global environment.

Do not deliver valuable CRD sewage assets into the hands of a private operator while calling it a "hybrid" solution. This would be subterfuge and sleight-of-hand.

Thank you.

Saturday, March 13, 2010

Coffee Night Speaker: Arthur Caldicott

“Vancouver Island's Watersheds in Peril”

Date: Tuesday, March 23, 2010
Time: 7:00 – 9:15 p.m.
Place: BCGEU, 2994 Douglas St.

Arthur Caldicott is an analyst of energy and mining issues in British Columbia. His
research, writing and presentations focus on the environmental, health, and public interest
aspects of those issues, as well as the economic considerations.
A company proposing a project will come to a community selling jobs and taxes as the
local benefits which will accrue from its pipeline, or mine, or mall. The company will
minimize the environmental impacts, avoid the fact that most of the jobs last only as long
as the construction period, and that the real economic benefits flow to its shareholders.
Caldicott tells the other side of the story – the parts the company is less keen to talk
Using thoroughly researched and verifiable information, his writing and
presentations are balanced and credible. He is an insightful and engaging speaker.
Twenty years as an IT professional, and ten years as an energy analyst have equipped
Caldicott with an understanding of what motivates business (it is the profit motive, of
course, but informed and nuanced by complex factors), and how our governments
frequently seem to confuse the corporate interest for the public interest. Communities get good information clearly presented – and are then better equipped to make informed
A sampling of Arthur Caldicott’s work is available at Please
contact him at 250-384-5551 or
Free Admission
Free parking at the Lifestyle foods plaza next door
Fairly traded coffee and tea are available with a donation
Contact: Nana 483-1277

Friday, March 12, 2010

John Luton's Presentation to the CRD CALWMC

March 10, 2010

I’m here to ask you to support the public option for sewage treatment.

I believe that public services belong in public hands.

We are transparent and accountable, and ultimately on the hook to provide the service project we are committing our current and future taxpayers to fund.

Private owners will build and operate a system that best serves their shareholders. We have a responsibility to serve our shareholders, and they are the citizens and taxpayers of Victoria and the Capital Region.

Private ownership and operation of our public services does not serve their interest, or that of future generations.

There are still many opportunities for the private sector in a public project and you’ve heard how important that is to our local construction industry.

When something goes wrong, the public owner and operator will say “how quickly can I fix this to make sure my shareholders get back the service they are paying for?” The private operator is going to ask “is this in our contract?”

I’m happy that those who have purchased private sewage treatment are so far happy with their systems. And lots of people were just as happy with their new Toyotas.

If my sewer backs up can I call the CRD, or am I going to have go through a call centre in Poughkeepsie?

At this meeting and at the meeting two weeks ago you heard about the many examples of successful public systems built and in operation in Canada and in the U.S., and about some of the failures of P3s here and elsewhere.

My example is a little different but illustrates well enough what we are exposed to with the P# model.

In 2008 numbers of transit operators in the U.S. who had sold fleets of buses and leased them back from private capital companies, insured by giants like AIG, a name that should be familiar to anyone who paid attention to our most recent economic meltdown. Cascading and complex contracts between the myriad players and financiers forced some transit operators to cut service to meet payment demands from the private capital companies in distress.

What do you do when your service provider goes bankrupt? AIG lately lost $8.87 billion U.S. in the fourth quarter of 2009, and company value dropped by 13%. The pressure to cut costs and return to profitability will ripple through their dependents and we’ll no doubt see what other public services in private hands are impacted as a result.

You don’t transfer risk to the private sector, they are selling their risk premium to you.

Our public option can be financed by the Municipal Finance Authority, an investor with a much sounder portfolio and a better track record than anything you can find in the private sector.

We need to worry about our triple bottom line – social, economic and environmental values impacted by this project. Private operators are worried only about their bottom line, and they will compromise our environment, ship economic benefits offshore, and will have little interest in the community and social impacts of the project and its operations.

The opportunity to adapt to new technologies and benefit from resource recoveries must be kept in public hands. We may not make a profit, be can reduce operating costs and help lower greenhouse gas emissions, an imperative we must be working for. Can we integrate more of our waste stream into a regional sewage system to generate heat, electricity or other recoveries, or will we have to purchase access?

Can we integrate more of our waste stream into a regional sewage system to generate heat, electricity or other recoveries, or will we have to purchase access? I believe that opportunity will be lost with a P3.

We already own the systems that will be used to transport our waste from source to plant and water to the sea. Let’s build on those assets, not give it away just to rent it back.

Once they have our sewage pipes, are we going to sell off our water? Certainly that’s what the private multinationals are looking for.

On the social side, I’d rather negotiate with the people who live and work in our community than multinational gamblers that run the world’s financial system – and badly it seems.

We will have to live with your decision for decades. Please make the right one for ourselves and our children. The public option is the sustainable choice for our community.

John Luton
Victoria City Councillor

Kim Manton's Presentation to the CRD CALWMC

March 10, 2010

"I would like to speak to you tonight about how two meetings have provided the framework of how I have spent the last three meeting was on Sept. 5, 2007 and the other is fast approaching - March 24, 2010"...the first meeting motivated me to prepare for the second...

My first meeting of the CALWMC was January 24th 2007 where I began my sewage treatment journey. The meeting that framed the way I would do my job however was on September 5, 2007….it was the Committee of the Whole meeting where those of you who were in attendance voted to support the P3 for the Patient tower at the Royal Jubilee. This meeting changed the way I viewed being a campaign coordinator, a citizen and a voter.

As I arrived at this meeting I assumed the room would be filled with citizens, local media and stakeholders – it is a hospital, healthcare - to my surprise I got there and found one media representative, 4 members of public, and a whole bunch of staff and consultants. To my bigger surprise I saw all the directors but one vote for the P3 but even more confusing was the dialogue around the table. I heard things like

• I will support the motion because the care centre is necessary for the community and I am ambivalent about P3’s
• “this is not the place to discuss P3’s – this information is way over our heads
• This decision needs to be made at the provincial level.
• Larry Blaine and his outfit are offering us a hospital for $107 million as a take it or leave it offer and we can not refuse this
• This debate is one of pragmatism and idealism
• I will reluctantly support the motion because we need the 500 beds

This meeting, the dialogue, the decision and the participation moved to frame my work over the next three years. That there were no members of the public there to witness these comments and no media there to report them…a major infrastructure project being handed to private corporations and no one was there. This is when I knew I had my work was cut out for me – hell if they didn’t show up for a hospital what are the chances that they would show up for sewage treatment?

So with over 50 CALWMC meetings and detailed notes combined with a mountain of reading on procurement under my belt I have taken the discussion to the citizens of the CRD. I have taken every possible opportunity to work with amazing activists, volunteers, stake holder groups, organizations, been to more that 75 public markets, community fairs, open houses, neighbourhood forums and community events from Saanich to the Luxton Fair..
I have talked to anyone that would have me – including you. On Sept. 5, 2007 I committed to do what I could to ensure that residents of the CRD have the information to make an informed decision about privatization so that they understood the dialogue and debate and that they, the residents, could then empower you to make informed decisions.

There have been hurdles and explaining P3’s was one… sewage ain’t sexy which has made engagement difficult. Many people don’t even know what the CRD is - let alone what procurement means but I can tell you without a shadow of a doubt that once they understand what privatization means in their community, the citizens of the CRD overwhelmingly want this system to be public. Of course I did run into a few people who believed in P3s – we agreed to disagree.

I also spent a lot of time (along with others) trying to raise this issue during the municipal elections and I know that at 4 separate All candidate meetings you were asked to stand if you supported public water and wastewater systems. I was proud to see so many of you stand. With our vote we entrusted you with our values and you now hold the responsibility to represent them– to represent us!

As I said the last three years have been framed by two meetings one in 2007 and one coming up in two weeks – there are significant changes between then and now…

On Sept. 5, 2007 you said that you received the information too late and didn’t have enough time to sort through it…

• This time you will have had the information for almost a month
• This time you will have had access to all sorts of evidence and information from around the world
• This time you have rooms full of engaged citizens and media
• This time you will be crystal clear about your residents want
• This time your decision will not only be witnessed but it will be communicated.
• This time you are accountable to your constituents
• This time you have the opportunity to represent us with confidence

In my efforts to engage our community I have handed out your contact information to more people than I can count. Sadly what I have heard over and over is that “it doesn’t matter what we tell them because they will do what they want anyway”.
Or “the province gets what the province wants…”
This is your opportunity to show people that they are wrong – that their voices and their actions do matter.

Alice Walker said that “the most common way people give up their power is by thinking they don’t have any”…you have an opportunity to reconnect citizens to their power, let them know you heard them.

Thank you,
Kim Manton

Thursday, March 11, 2010

Joan Russow's Presentation to the CRD CALWMC

Procurement must not be yet another act of negligence.

Joan Russow PhD
Presentation to the CRD, March 10, 2010

There is a long history in Victoria, of negligence on the part of the CRD and of other authoritative figures. Particularly, from the CRD engineer, Michael Williams, who in the 1980’s authored a pale blue pamphlet with the poetic title "To the sea"- essentially he argued that, in Victoria, dilution was the solution to pollution. His work was eagerly supported by years of so-called academic research by two University of Victoria professors, Dr. Derek Ellis and Dr. Jack Littlepage, and regrettably their work was affirmed publicly by Dr. Shawn Peck, the then Deputy Provincial Health Officer
[even today he is still involved with his anti-treatment campaign coined "will haste make waste] and even endorsed by the illustrious leader of the Western Concept Party when he made spurious claims that "Nature already provides us with an effective, inexpensive and environmentally beneficial treatment system.
Then in the late1980s Dr. Tony Boydell conducted public hearings for the CRD on Sewage, and at every hearing he was told by most of the citizens that there must be some form of sewage treatment; yet when there was a 1990 referendum, there were three options, one of them to do nothing. So here we are now in 2010, and there is even an anti-treatment group formed to still urge the CRD, the Provincial Government and the Federal Government to do nothing and there are even different levels of government, ignoring the evidence of P3 failures, still pushing for P3s, and we as citizens are still before the CRD declaring that we want sewage treatment, and we don¹t want P3s. I have tried to unravel the convoluted decision-making process related to procurement, and I asked a not-to-be named official about the process. I was told that the Federal Government will not do anything until the Province commits -- probably that is code for committing to P3s. I was then told that, before there would be a commitment for provincial funding, there is a requirement under the Capital Asset Management Framework, that public sector agencies must investigate alternatives for capital development, including the P3 option to "design, build and operate". When I asked about the degree to which citizens' views will be taken into consideration by the Provincial Government, I was told that the CRD report following the public hearings, along with an investigation report, would form the basis for the Provincial decision. The investigation Report, however, is being done by Ernst and Young, whose firm has not only been embroiled in lawsuits (see Google “Ernst and Yonge” and lawsuits, related to fraud, breech of trust and negligence, but also appears, because of Ernst and Young’s pro-P3s, to be in conflict of interest, and does not have the sufficient expertise to address the issues of social and environmental impacts.
(See attached note about the various lawsuits related to Ernst and Young). In 2002, Ernst and Young launched, with a former Employee of Arthur Andersen’s firm, an Environmental Advisory Services practice within its Real Estate Advisory Services group. It is obvious that due diligence on E and Y was not carried out.
Jim Lloyd in his presentation to the CRD stated the following: "Ernst & Young is working on more P3 deals than any other financial advisory firm in the world and last year won the most P3 engagements, according to Tim Philpotts, who leads Ernst & Young’s Canadian Initiatives for P3s". The question then arises would the Provincial Government be able to allow or be prepared to allow public concern to prevail, and support the public¹s call for Design-Bid-Build, as well as the public’s opposition to P3s? It is, however, clear that the BC Government has made a firm commitment to P3s. In their Partnership BC document, the BC Government proclaims that P3s are the growing trend in Canada in the development and maintenance of public infrastructure, and then expounds on the virtues of the P3s. Now what happens if the CRD and BC Government actually listen to
citizens’ concerns? What can the Federal Government be expected to do or be able to now do? Can the Federal Government be expected to or be able to support a potential CRD, and Provincial Government opposition to P3s? In Infrastructure Canada is the following statement:
"The benefits of using P3s include: access to private-sector capital and expertise; faster completion of projects; and the transfer of risk to the private sector. In Canada, the Federal Government is taking a leadership role in developing P3 opportunities by establishing the P3 Fund. This fund will support innovative projects that provide an alternative to traditional government infrastructure procurement.” In addition, in recent years there have been several trade agreements which have resulted in a requirement for open sourcing: Internal Trade Agreement, involving all of Canada, the TILMA involving BC and Alberta, the WTO Procurement clause involving the US for a period of time, and more recently the Comprehensive Economic Agreement Negotiations (CETA) involving the European Union which is in between the 2nd and 3rd negotiating round. ...The next three rounds will tackle progressively more difficult issues of procurement, investment, etc
The WTO procurement agreement will permit companies like Bechtel Corporation (see Democracy Center report on Bechtel in Latin America)
The CETA could allow for a company like Veolia or Suez to seduce the provincial and Federal Governments into embracing P3 proposals. (see attached recent revelations about Veolia’s fiasco in Bruxelles, and the case against Suez’ exploitation of developing states (see Global Day of Action, Latin America, against Suez) . Thus will the biased Provincial and Federal Governments keep demanding more research and the P3-prone private sector keep lobbying, until finally the concerns of the citizens will be trumped and the P3s, victorious, and then the citizens will be given the option;
either you agree to P3s and receive Provincial and Federal funding or you oppose P3s and through taxes bear the cost.
So in April will all three levels of government continue to be negligent, being seduced into P3s, and will the people be condemned to live with the consequences, OR will there be the political will to seriously respect the will of the people. Citizens have a legitimate expectation that elected officials will opt for serving the public good.
[This presentation (and all of the others published in this blog) was made at a public hearing, so all of it is in the public domain. The Council of Canadians is publishing it as a public service in order to allow as many citizens as possible to read it and comment on it in a free and democratic process.]

Thursday, March 4, 2010

Jim Lloyd's Presentation to the CRD CALWMC

February 25, 2010

My name is Jim Lloyd and I am a retired Water Resources Technologist. I have worked in Wastewater Plant Operations for many years in Ontario and at two plants in the Victoria area. Over the years I have seen, reviewed and worked with many examples of the good, the bad and the ugly of wastewater plant designs. And I am sad to say, the bad and the ugly, seem to be becoming more common these days.

Design-Bid-Build is the Best Option

Based on my first hand experiences with wastewater plants I know the Design-Bid-Build is the best available option. It will give the CRD complete control over the project, which is vital to a successful conclusion.

With a complete and detailed design in hand the CRD can then tender the project and get firm prices and delivery dates from the largest number of bidders possible. This approach will give the CRD the best chance to eliminate the possibility of later cost overruns and/or delays in the project.

It is a Real P3: Private design, Private building and Public operation.

One key component that must be included in any contract is that the designer is held financially accountable for any additional costs due to design problems. This is vitally important since even small design issues can turn into multi million dollar problems.

Learn from History – Don’t Repeat It

The new Halifax Wastewater treatment plant was initially a Design-Build-Operate (P3) project with the French multinational, Suez leading the consortium. After Suez tried to change the terms of the operating contract the city took back the operational component but retained the same consortium to design and build the project.

After just one year of operation the $54 million Halifax Wastewater Treatment Plant had a catastrophic failure in Jan. 2009 and will be out of commission until the Spring of this year. Repairs costs are estimated at 11 million dollars.

It is a text book example of “What can go wrong, will go wrong” and why you have to properly design for it. The Design-Build option is more prone to this type of outcome.

Design-Build or P3 – Too Many Ways It Can Go Wrong

With a Design-Build or P3 the price is set before the design is even started, therefore the project will be designed to fit the budget. To maximize profit or stay within budget cutting corners will be sure to follow.

So, on one hand you may have price certainty but on the other hand you will have product uncertainty as Halifax found out.

A Design-Build approach may work with simple projects like highways or condo developments but it is not the best choice for wastewater plants.

The P3 option also greatly reduces the number of bidders on a project. You could be down to one or two bidders at the end of a long drawn out process.

Hamilton Wastewater Plant

Hamilton, Ontario tried the privatization of the operation and maintenance of their wastewater plant in the 1990s. Over the term of the original contract there were many problems and the private company went through many changes in ownership including being owned by Enron.

The private operator had basically operated the plant on the “run to failure” maintenance principal.

In 2004, the contract was expiring and Hamilton put it out for public tender. Along with a number of private companies the city of Hamilton also put in their own bid to operate and maintain the plant. To no ones surprise Hamilton found it was much cheaper to do it in-house and they took back the operation, hired back staff, saved money and controlled the risks.

“Procurement Business Plan” – Who’s Minding the Hen House?

I would also like to comment on the documents that the CRD will be using to make a very difficult decision. The “Procurement Business Plan” and public information brochures with their comparison of the different procurement options were drafted by Ernst & Young. I consider this a real conflict of interest since Ernst & Young is very biased toward the P3 option and will gain financially if the P3 option is chosen.

Their own web site states:

“Ernst & Young is working on more P3 deals than any other financial advisory firm in the world and last year won the most P3 engagements, according to Tim Philpotts, who leads Ernst & Young’s Canadian initiatives for P3s.”

In closing:

-A traditional design-bid-build procurement method is the best approach

- keep control of the operation.

-Don’t rush the design phase, take your time and get it right the first time.

-Learn from history, don’t repeat it.

-and finally, the Provincial government may have forced the CRD to consider privatization (P3s) as an option – but the CRD is under no obligation to go that route.

Thank you for your consideration of my comments.