Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Campbell still haunted by BC Rail deal

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Mark Hume in the Globe and Mail this morning has a useful summary of events surrounding the privatisation of BC Rail.

BCOL 4613 and 4612 North Vancouver 20030830

The information in the story comes from the (partial) release of documents requested by the NDP under the provincial Freedom of Information Act. The documents themselves can be seen at a the BC NDP’s web site. There are thousands of them but, of course, they have been heavily “redacted” to try to conceal important details. Even so there are plenty of insights into the mind of Gordon Campbell.

In an Aug. 19, 2002, e-mail to a BC Rail employee, name blanked out, Mr. Campbell couldn’t state it more clearly: “I assure you that the government is not looking at the privatization of BC Rail as part of our transportation strategy.”

This was of course an outright lie.

while publicly denying BC Rail was for sale, the government began secretly preparing to announce the deal. A file marked “confidential” shows that by November, 2002, the government had a media plan drafted.

“The communications strategy presented in this document has been prepared to provide guidance for planning and implementing an announcement regarding a decision to sell the industrial freight division of BC Rail,” it says.

It notes the “New Era campaign promise ‘not to sell or privatize BC Rail’ ” will cause problems, but tells ministers to focus on the demand of BC Rail customers for better service, and on the “serious financial risk to BC taxpayers” posed by the railway’s $639-million debt.

There was also favouritism – since CN was given access to BC Rail’s customers – some thing not afforded to CP (who then dropped out) and BNSF/OmniTrax.

But of course the worst embarrassment for the BC Liberals and Gordon Campbell was the raid on the BC Legislature which meant that the sale of the port subdivision in Delta could not proceed. Two ministerial aides, Basi and Virk, have been charged but 5 years later the case still has to come to trial.  Obviously it will suit the BC Liberals if the trial does not start before the scheduled provincial election in May.This would almost certainly reveal more of the detail which is currently concealed, which includes correspondence from the Premier’s office.

A number of questions come to my mind. If the sale of BC Rail was such a good deal why was it necessary to put so much effort into “spin”? If the private sector process was the best way to ensure a better financial outcome, why was one bidder favoured over the others? Only Basi and Virk have been charged – but were they really just opportunists trying to line their own pockets?  Given the push for privatisation came from the very top and Gordon Campbell has a well earned reputation as a control freak who does not share power with his own cabinet, how far does the process in the case of BC Rail reflect a broader attitude adopted in other privatisation deals? For example, when the deal to create a P# for the Port Mann Bridge replacement and Highway #1 expansion fell through because of the reluctance of the banks to finance it, why were the proposers of that P3 given a deal to build under direct government finance? Should there not have been a competitive tendering process for the elements that will now be financed by taxpayers? Have not the construction market conditions changed so drastically since the plan was hatched that new bidders would now want to enter the market freed from the need to raise funding privately?

Campbell should be haunted by the BC Rail deal – because it gives the lie to his ill deserved reputation for being the better of the two main party leaders at dealing with business. Yes the BC Liberals are “business friendly” but not seemingly to all businesses. And their attention does not seem to be wholly focussed on what is best for BC. Their track record is that decisions are made and then various documents are generated that support the decision. There is absolutely no commitment at all to an open, objective and trustworthy process. Just one that can be made to look right if enough communications specialists can be hired.

Written by Stephen Rees

March 7, 2009 at 7:26 am

Posted in BC Rail

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