While the current government has been very quick to jump on the P3 bandwagon, the PC Party believes there are flaws in this plan. Unless the P3 can generate income such as the Regina Water Treatment plant or toll roads, they are just debt under a different name. The majority of P3s do not give the taxpayer the best value for money.
The PC Party of Saskatchewan is proposing a different approach which will allow the taxpaying public to become involved in the process and invest along with the large private investors to gain future benefits for themselves by creating a process known as Community Partnerships.
Principles of a Community Partnership
A Community Partnership must have the following objectives:
- To provide value to the taxpayers of Saskatchewan including the provision of high quality services and workmanship at a value proposition that is resultant from efficiency and the use of best practices.
- To provide an investment opportunity that is open to the involvement of Saskatchewan investors and meets all statutory reporting requirements of a public offering.
- To provide complete financial transparency to the general public as to the scope of the project as is required in any public share offering, to face the scrutiny of the open market to confirm its viability and its effective rate of return for taxpayers, the private General Partner as well as the private investors.
Community Partnerships are composed of the following stakeholders:
1. A Registered Limited Partnership
2. Public Participation – 1/3 - Government of Saskatchewan
3. Private Placement General Partner – 1/3 - The Manager of the LP
- Must meet standard of possessing proven technical and financial ability to meet the capital requirements of the entire project taken on by the partnership. The General Partner is subject to cash calls for cost overruns, etc.
- The General Partner to be compensation by an identified percentage of project costs plus bonus incentive for completion of project on time and on budget.
4. Private Investors – 1/3 - The General Public, with the Government of Saskatchewan provide RRSP rights to the investment on the following basis:
- 50% of each investor’s investment (to a maximum of $10,000) is eligible to be structured into an RRSP upon agreement of the investor to lock in the RRSP portion of their investment for a minimum period of 8 years
- The investor is a resident of Saskatchewan
- Private Investors are not to be subjected to cash calls
- The Private Investors are compensated by an identified rate of return that is disclosed in the prospectus
- Private Investors are free to sell their shares to third parties (other than the General Partner) at their own discretion. Upon completion of the project, the General Partner may make an offering to the Private Investor to solicit their shares.
The registered limited partnership model is based on a performance-based agreement; with the public sector partner setting quality standards that the General Managing partners is required to meet.
The partnership model delivers greater accountability due to a long-term, performance-based agreement.
The partnership model allows private sector innovation and efficiency in all phases of the project.
The registered limited partnership will be subject to the rules and regulations for public offerings for trading securities as set out by Saskatchewan securities legislative standards including the issuance of a public prospectus, annual audit review, and quarterly public financial disclosure requirements.