Confederation Bridge: Canada's most successful public-private partnership - 07 Dec 2009 - TheGlobeAndMail.Com

Source : http://www.theglobeandmail.com/news/opinions/confederation-bridge-canadas-most-successful-public-private-partnership/article1391905/

To most people (excepting construction aficionados), having the world's top public-private partnership investors and operators bestow their highest honour on Canada's Confederation Bridge last week may come as a surprise.

But, on Prince Edward Island, the defining feature of the province's identity is the 13-kilometre ribbon of concrete – a vast, engineering marvel of steel, cement and electronic wizardry that measure tides, ice flows, wind, air pressure, snow flurries and anything that affects the elements. From New Brunswick, the Confederation Bridge looks more like a highway that rises more than 100 feet above the treacherous water; from PEI, however, the bridge is far more majestic, a sweeping stretch of 44 suspended pillars like a vast Roman aqueduct, joining the mainland to the island.

So this gold award from the Canadian Council for Public-Private Partnerships is no surprise in Atlantic Canada. The only question is why we have taken so long to recognize both the remarkable engineering and the even more remarkable public policy innovation that went into this great feat.

Transportation has been an island obsession for two centuries. Governor Walter Patterson commissioned a boat to take the mail across to Pictou in the 1780s. Regular service began in the 1820s. After Confederation, steamer service became a priority – indeed, George-Étienne Cartier, on his trip to Charlottetown in 1869, argued for a strong steamship for continual communication. When the island joined the Dominion in 1873, the “better terms” included a pledge for year-round communications.

The first advocate was senator George Howlan in the 1880s; he proposed a subway on top of the seabed. Father Alfred Burke led the charge in the late 1890s, calling for a tunnel. Vast ice-breaking ferries such as the Abegweit (which carried train cars, trucks, campers and automobiles) and a causeway, promoted by Walter Shaw and John Diefenbaker were all attempts to deal with this transportation challenge. In the 1965 federal election, Lester Pearson promised to build a causeway/bridge/tunnel that would cost $148-million – which ballooned to twice that by engineering consultants.

The Northumberland Strait, as an extension of the Gulf of St. Lawrence, is a fast-flowing waterway that deceives the eye. Below the water is a staggering diversity of God's marine jewels – oysters and lobsters, herring and bluefin tuna. Clearly, a causeway or a bridge or some form of link would attract stakeholders who prefer PEI as an island. But infrastructure requires financing engineering prowess because, in some winters, the frozen ice could strand even the famed Abegweit for up to 30 hours. The huge tourist market and the movement of goods by trucks and trains eventually led to the practical issues of ferry replacement and the huge upkeep of the terminals at Borden and Cape Tormentine. This was the problem facing the Mulroney government in 1984. Replace the aging ferries, or find another means of transportation.

By happenstance, the issue came to a head during a breakfast meeting at 24 Sussex Dr. Brian Mulroney was playing host to Japanese prime minister Yasuhiro Nakasone, and the conversation moved to Japan's experience in dealing with large deficits. Mr. Nakasone said his government was getting the private sector to undertake finance projects such as the bridge across Tokyo Bay. The bridge, he indicated, was 57 kilometres, and the cost $7.5-billion. Two hours later, at a budget meeting, Mr. Mulroney recounted this story and wondered about potential projects in Canada. My response was the bridge to PEI and airport terminals. Suddenly, the wheels were set in portion, and the Clerk of the Privy Council, Paul Tellier, requested a memo on the PEI link.

When Don Mazankowski, the minister of transport, first heard about the initiative, he thought it was an idiotic idea, especially given the ballpark cost of $1-billion. Within a week, however, he learned that replacement ferries would cost $400-million each if built in a Canadian shipyard (but only $175-million if built in South Korea). Eventually, the federal government received six formal proposals (one involving a combined causeway/train system). It took eight years of financial negotiations, prolonged political protests that divided PEI, and a provincial plebiscite in 1988. Premier Joe Ghiz was against a fixed link, but islanders voted 59 per cent in favour.

The Confederation Bridge opened in 1997 and remains a testament to Canadian engineering ingenuity. Today, it's hard to find islanders who were originally against the fixed link, because that link has enhanced small business, exporters and the tourist market.

The bridge is a great case study of a truly successful public-private partnership. It cost $840-million, built by Strait Crossing Inc., financed entirely by the private sector using the revenue stream from tolls, the former ferry subsidy and the financial obligations of the federal government for maintenance. In two decades, ownership reverts to Ottawa.

So what lessons are to be learned, given Canada's crumbling infrastructure?

The first is that large-scale infrastructure usually involves a combination of multiple stakeholders arguing the merits or demerits on political grounds, without much serious economic analysis, or other groups (often corporations) arguing the merits of the project on productivity grounds, with little understanding of the political hurdles.

A second lesson is that infrastructure (roads, bridges, railways, ports, terminals, airports and subways) are neither public ventures alone nor private-sector responsibilities – they are two sides of the same coin.

Canada has within its grasp a rare opportunity to be a global transportation leader. Properly positioned, we have the potential to build world-class infrastructure to serve all of North America. This opportunity to lead is ours to lose.

Charles McMillan, professor of international business at York University and author of Eminent Islanders, served as senior policy adviser to prime minister Brian Mulroney.