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Unless we learn the lessons of the 407 fiasco, we are condemned to be fleeced again — this time on Hydro One.
If you build it, they will come. And pay the toll. When Highway 407 opened in 1997, drivers not only came, they kept coming back — transforming the toll road into a short-lived success story.
Two years later, the storyline changed: The PC government of the day took an abrupt detour by brokering a 99-year lease of the highway for a fraction of its true value. If you lease it — and undervalue it — they will profit. At our expense.
The 407 deal is now considered a financial blunder on a par with Newfoundland’s lease of Churchill Falls to Quebec, and China’s surrender of Hong Kong to Britain, for equally ill-fated 99-year leases.
As today’s Liberal government ponders selling off part of Hydro One’s transmission lines, after more than a century of public ownership, the 407 debacle looms over the debate. Unless we learn the lessons of that fiasco, we are condemned to be fleeced once again.
If the toll highway hadn’t been handed off for a pittance in 1999, it could have been paid off by now. Imagine driving free on the 407, instead of being hit up for steadily increasing tolls that have flowed to the consortium’s overseas owners for years.
Better yet, imagine a government with the spine and sagacity to raise tolls to what the market would bear — as the consortium did, but as no politician seems willing to try — and then used those windfall profits to bankroll the infrastructure spending this province so badly needs.
If those revenues had flowed all this time to the public treasury, the financial pressure to privatize Hydro One would be less intense today.
Built at taxpayer expense for about $1.5 billion, the 407 was handed over to the new private operators for an unconscionably low $3.1 billion. In a classic example of short-term calculations versus long term stewardship of a public asset, the Tories declared a $1.6 billion “profit” from the sale to meet their politically-inspired deficit targets.
For the rest of this article, click here: http://www.thestar.com/news/queenspark/2015/03/30/pc-blunder-over-highway-407-looms-over-liberals-on-hydro-cohn.html