Saint John gets $115M for water upgrades under P3 model
The City of Saint John is getting nearly $115 million to upgrade its water treatment system under a public-private partnership model.
The federal and provincial governments will each contribute $57.3 million to the Safe Clean Drinking Water project.
Officials made the announcement at City Hall on Friday afternoon.
A new water treatment plant and accompanying infrastructure for Saint John has been estimated at $220 million.
Council had voted in March to move forward with a public-private partnership to finance the project.
Saint John MP Rodney Weston had previously said Saint John council had no choice but to push forward with a public-private partnership on the new water system.
He said the project is too expensive for the federal government to come up with one-third of the cost.
In the past, large infrastructure projects, such as the water system upgrade, would be funded equally by the federal, provincial and municipal governments.
But federal rules now say municipalities must, on more expensive projects, consider adding a private sector partner.
Under a P3 model, Saint John administrators get the comfort of knowing exactly what the price will be and how long construction will take, according to a consultant's report.
PricewaterhouseCoopers said in March the city could save $3.2 million by using a P3 model instead of the traditional procurement model.
But Saint John's former commissioner of Saint John Water, Paul Groody, has warned privatization of water would be a "costly, wasteful, avoidable mistake."
Groody contends a public-private partnership would be more expensive and too costly for ratepayers over the long run.
