Thoughts and Opinions On Today's Important Issues

Friday, May 14, 2010

Xmas Is Early; Santa Baird Is Coming To Town

Ho, Ho, Ho. Santa Baird is coming to town. Michigan Legislators better be good for goodness sake.

Damage control big time. Firm up those Democratic House members. Put pressure on those Michigan Senators.


Don't you get it. If the P3 legislation is in place, who cares what the Senate does. They are irrelevant then. Let them have their "up or down" vote on DRIC. It does not matter. MDOT would have the power under the P3 Legislation to enter into P3s no matter what the Legislature says and even if they are absolutely opposed to it.

So much for legislative oversight! So much for taxpayers' pocketbooks.

That's why Santa John Baird, Canada's Transport Minister, is coming here.

The Time is NOW to beat Matty Moroun is the hidden subtitle of the talk.

After all, Canada has wanted to take over the Ambassador Bridge for a generation or two. Baird has beentrying for 16 months ever since he became Transport Minister. After all, the Prime Minister gave him the authority to buy it in his secret mandate letter as ex-Guv and DRIC lobbyist Blanchard informed us. Santa was authorized to give a loan to Michigan of UP TO $550M to Michigan to help make it happen. DRIC is nothing more than putting the screws on Moroun to get him to sell out cheaply.

Santa could have loaned the money directly. Santa could have given Michigan a gift. But I don't think Santa has the money actually. I could not find it in Canada's Economic Action Plan. I think all Santa had was a 2-page letter that pretended to give money to Michigan. Heck, we don't even know what the terms and conditions are yet but Santa wants everything signed off NOW.

Nope, it was all tied into passing the P3 Bill. Wow, paying that much money to have a Bill passed and in public too.

Consider this case. Can you imagine what would happen if it got out that a US company offered the Government of Canada $550M to pass legislation to help out that Company's business. Is that allowed to be done? Back in the good old days when I worked for the Canadian subsidiary of an American company I believe that we had a term in our contracts that forbade this type of action.

Now as a poor lonely Blogger, US$75 is a lot of money for me to spend to buy a ticket to hear the cliches come out of the Minister's mouth at the Lunch. Who needs the heartburn and indigestion. We have heard them all before anyway ad nauseum.

So perhaps I could ask a favour. If you are going to the lunch, let me know how many of the following lines he will use. You know the ones:

  • most important border crossing and infrastructure project
  • how much trade goes over it
  • truck traffic will triple (I thought before it was only going to double) since it has gone up in 2010
  • importance of trade for both countries
  • border thickening
  • jobs
  • security and redundancy
  • blah, blah, blah

Actually if you, dear reader, want to save the $75, go here to listen to the speech. It will be about the same with the same old stuff. BLOG: "Baird Interview: Help For The Bridge Company DRIC Lawsuit"

Expect also that the DRIC-ites will convince him to insert some language in the speech to counter the points I have raised in my BLOGs as he tries to answer some of my 20 DRIC questions.

To be serious, if he really wanted to accomplish something in Detroit, he should have gone to Warren and met up with the Bridge Company people and figured out how to work together for the betterment of the region.

Thursday, May 13, 2010

DRIC: Jobs, Jobs

I am sure that you thought my subject line was in error.

I am sure that you thought it should say Jobs, Jobs, Jobs.

In fact, if this story is true, it probably should only say "Jobs."
  • Windsor-Detroit bridge job estimates viewed with caution

    Government officials on both sides of the border have repeatedly stated that thousands of direct construction jobs would be created during construction of the new Detroit River International Crossing (DRIC) project.

    But officials in the construction industry in Ontario and Michigan are cautious about those estimates, saying the actual number could be much lower.

    At an April 19 news conference in Detroit featuring high profile Canadian and U.S. political, business and labour officials, the number 10,000 was mentioned for direct construction jobs in Michigan alone…

    But industry officials are seeing through the rosy job predictions.

    “The big numbers are out there,” agreed Jim Lyons, executive director of the Heavy Construction Association of Windsor. But companies vying for the DRIC work have mentioned figures that “are not even close to (those) estimates.” He said people using the bigger numbers are “really throwing some major multipliers on top of all of the components.”

    Lyons suggested a more realistic number would be 500 or 600 jobs per year, at least on the Canadian side, “as a max,” leading to a total job number of about 3,000 over the five to six-year duration of the project.

    He said the type of employees would change from year to year. “And you won’t be seeing any major infrastructure in terms of the new roadways and bridges constructed until we get a lot of the dirt out of the way and that’s likely going to be in 2012-2013.”

    Each phase of the project would employ different types of workers.

    Lyons said that since the industry uses a two-for-one multiplier, “there’s potentially another 6,000 jobs out there” beyond construction over the project’s lifespan beginning, say, with firms supplying materials like concrete and iron.

    Most workers would be recruited from the Windsor area, though some major components, such as for bridge work, would likely require workers from outside. “There will be some transients in the actual bridge construction,” he said...

    For their part, Michigan construction officials say they would be happy to take any jobs, though Mark Sawyer, executive director of the Associated Builders and Contractors of Southeastern Michigan, said there is concern that if the project is publicly financed contractors may be mandated to use union labour...

    Last year President Barack Obama signed executive order 13502 which encourages Project Labor Agreements for federally-funded construction of more than $25 million.

    “The choice of using forced union on construction projects is a political football,” Sawyer said.

    Baird said the money offered to Michigan would “allow the state of Michigan to leverage the federal dollars which will be far greater” than what the state would pay.

    Kevin Koehler, president of the Construction Association of Michigan, said the reason for the absence of major highway projects in Michigan in recent years has been the state’s inability to leverage federal funds.

    “We’re afraid we’re going to lose future road project funding because of the (lack of) matching dollars,” he said."

Psssst. Do not forget that the Ambassador Bridge Enhancement Project can start very quickly if the Governments stop playing games and putting up roadblocks. The Bridge Company can offer up toll credits too for Federal matching grants.

DRIC-ites Rule

Wow, am I impressed.

You see, DRIC-ites think they are very powerful now.

After all, Canada's 2-page letter errrr loan of UP TO $550M may mean that our Government will be able to tell Michigan what to do once we see the terms and conditions of the loan if we ever do before it is too late.

After all, passage of P3 legislation means bureaucrats will be able to tell Michigan legislators to shove it because they never have to speak to them again as they do Megaproject boondoggles.

After all, P3 operator obscene profits and upfront Wall Street banker fees are riskless and a no-brainer, for them, even though Michigan taxpayers may be forced to make "availability payments" for as long as they are told with little recourse or face default.

Now a DRIC-ite thinks he makes the rules on this BLOGsite:
  • ----- Original Message -----
    From: [Name of DRIC-ite]
    Sent: Wednesday, May 12, 2010 6:59 PM
    Subject: 20 questions

    Ed, the supporters of the DRIC project would love to answer your 20
    questions, but it doesn't look like there is a way to post them on your
    blog directly.

  • On 5/12/10 7:56 PM, "WindsorCityBlog" wrote:

    Send them to me and I will post them

  • ----- Original Message -----
    From: [Name of DRIC-ite]
    To: "WindsorCityBlog"
    Sent: Wednesday, May 12, 2010 8:18 PM
    Subject: Re: 20 questions

    Let me post them and we'll do that.

  • ----- Original Message -----
    From: "WindsorCityBlog"
    To: [Name of DRIC-ite]
    Sent: Wednesday, May 12, 2010 9:33 PM
    Subject: Re: 20 questions

    Sorry. I post reader's comments on my BLOG.

    You are no different than any one of my other readers as far as I am concerned."

The BLOGMeister is the one who makes the rules on here. And the rules are pretty clear about opening up my BLOG to comments...Not going to happen whether anyone likes it or not given the law and how people's comments can almost destroy a BLOGsite as another BLOGGER in Windsor can attest as well.

Oh and just so the DRIC-ite understands, I love fisking too.


Scrap the Lufthansa study.

Forget fixing the runways.

Who needs plants and land development at the airport.

No need to upgrade E C Row so traffic can flow fron our transportation hub to the border.

Middle East Airlines, Westjet, Porter...stop in London.

Cargo the canal instead.

If the Chair of the Board of YQG, his Chief of Staff and the President and CEO of YQG don't use YQG for flying, why should anyone else. And please, if others are made to change in Toronto to fly to DC if YQG is used, then why didn't Edgar (aka Eddie), Norma and Federica lead the way. Simple, it adds extra time to the flight because it is not non-stop.

Unbelievable vote of non-confidence. It destroys the aiport's slogan in a flash. YQG is now

YNSQG---Your Not So Quick Getaway

Jim Blanchard's "Labor Of Love"

We know that if you want to get legislation passed in Michigan, it will cost you about half a billion dollars. That is what Canada will pay for P3 legislation.

But what is the price of working for love in Michigan?

I read an article in Gongwer, one of the Michigan legislative news services, that gives an indication. It can be pretty costly

This is how Michigan's ex-Governor Blanchard describes working on the DRIC project:
  • "Building the Detroit River International Crossing could be one of the biggest boons to the Detroit region and the state, former Governor James Blanchard said in an interview, and while he is a paid consultant supporting development of the bridge he said, "like most of what I do, it's a labor of love."

While Jim calls it a boon, others call DRIC a boon-doggle!

The price of love, why it's like buying an expensive car or a private plane or a yacht and asking what the price is. If you have to ask...:

  • "Crain's Detroit Business has reported that Mr. Blanchard is making $630 an hour for his consulting services. Asked about that, Mr. Blanchard said he is charging the Corradino Group his normal fee, minus a 30 percent discount.

    Asked what his normal fee would be, Mr. Blanchard laughed and said, "You can't afford it."

Fortunately, for Jim, labouring for love pays well, about $900 an hour if my math is right. Thank goodness that Jim is in love. Can you imagine the price if he was not!

We know that negotiations with Canada went on for 8-9 months. Jim is quite modest about his role but he should not be. Why, he knew all about the possible purchase of the Ambassador Bridge that was in the Prime Minister's secret mandate letter:

  • "Mr. Blanchard was involved in some of the discussions on that proposal, which he said was first proposed by MDOT... Though he would not say how long the proposal was under consideration, Mr. Blanchard said Canadian officials reviewed it for awhile before approving it last week."

I would not mind labouring under those conditions.

We know this about Jim:

Tell me, is it normal for MDOT consultants to hire lobbyists? Whom do they lobby? Weren't DRIC consultants supposed to be neutral and not advocates? If they are biased, could that contaminate their findings and require everything to be restarted? I sure would be upset if I was on the losing side.

In looking at the form, I am not sure I understand the answer to Q14 given the word "indirectly."

To be honest, I am not sure of Jim's orientation. We know he works for a DRIC consultant but the article also claimed:

  • "That also includes speeches on trade he once gave at the behest of the Ambassador Bridge executives, Mr. Blanchard said."

Now Jim seems to be a pretty possessive type:

  • "They can't go for us on the merits so they do things like go after our governor because she was born in Vancouver," he said."

But he need not fear. Money is no object for his suitors:

  • "In fact, given the scope of the money being spent on the question of whether or not the Legislature should approve or disapprove of the DRIC project by June 1, as required by PA 116 of 2009, Mr. Blanchard laughed at the idea it would even come into play as a criticism.

    "There isn't anybody they aren't working with that hasn't gotten their money," Mr. Blanchard said."

What's $630 an hour when you are wasting millions in other words! Why it's lunch money, free lunch money.

I think though that Jim is pressing a bit too hard. His rushing to the P3 altar may scare off some people:

  • "And while he is confident the Legislature will act to approve the project by June 1, even if it does not the project will not go away, Mr. Blanchard said. "It would be better to get it done before the election," he said."

Some might think he wants consummation because some potential new Legislators are against DRIC as the article states:

  • "the project doesn't get much support from the announced candidates running to be Michigan's next governor."

Poor Jim, if the DRIC is turned down, it would be considered a costly comedy. All of his efforts for nought. Why some might call it Jim's "Love's Labor's Lost."

The Square

Wednesday, May 12, 2010

The Answer To Question 20

O, woe is me, To have seen what I have seen.

Actually, I did not see anything as you shall see.

Remember that list of DRIC questions I posted the other day in my BLOG "The 20 Questions The DRIC Lobbyists Won't Dare Answer." In effect, to P3 or not to P3 DRIC. That was the big question.

I have to ask the tough questions of DRIC supporters. I must be cruel, only to be kind to taxpayers.

I got this invitation in the mail. Well, technically, it was not sent to me exactly but who cares I got it. It came from Senator Basham of Michigan, one of the big DRIC supporters. It was sent to a number of Legislators:
  • "Dear Colleagues:

    A number of you have approached me with questions regarding the bridge issue. Based on the questions, there is a lot of misunderstanding of the details the history and benefits of the Detroit River International Crossing (DRIC).

    In partnership with Representative Rashida Tlaib, Canadian government officials, Detroit Regional Chamber, MDOT and other representatives that have been involved in this important issue from the beginning, we have coordinated a luncheon on Tuesday, May 11th at 12:30 p.m. in Room 424 of the Capitol Building.

    This is a time to ask all your questions and get the facts, history and information needed to make a well‑informed decision on this issue.

    To RSVP or if you have any questions, please contact [Name of person] in Rep. Tlaib's office at 373‑0823."



    State Senator

    8th District

O what a rogue and peasant slave am I. I might have thought about crashing the luncheon but I knew there are no free lunches in Michigan. Except if Canada is lending UP TO $550M. After all, rich gifts wax poor when givers prove unkind and foreclose if there are defaults in loan agreements.

In any event, I did not want to create an international incident similar to what happened at the White House dinner with the gate-crashers so I sent this note instead:

  • "Dear Senator Basham,

    Regretfully, I am unable to attend your luncheon today. Perhaps though I could impose on you and ask if these 20 questions could be answered by the DRIC people:"

I then listed the Blogged 20 Questions. Though this may seem like madness, yet there is method in 't. Obviously, I felt that something was rotten in the State of Michigan regarding P3s so I was hoping for answers.

How weary, stale, flat and unprofitable. I tried, I really did. I wanted those questions answered for you, dear reader, and for Michigan Legislators too. I wanted them to know that the State should neither a borrower nor a lender be. If the P3 companies could not find the cash, it was their tough luck.

Alas and alack (more Hamlet language just for you) my inside moles at the luncheon told me that Representative Tlaib who did most of the talking did not even mention my questions never mind answer them. She made some comments about the Ambassador Bridge Company I was told. However, the lady doth protest too much, methinks.

That it should come to this. I am truly sorry. All is not well. Howver, I did get an answer to Question 20

  • Q. How many of my questions will they answer?

    A. None.

Hardly a suprise is it. If they had answered any of them, Tlaib and Basham would have been hoist by their own petard.

With all of the drama and theatrics of the Guv's breathless intervention, it's true on the DRIC file: the play 's the thing.

The Answer To The Star's Question: Windsor Artsfest Weekends

The Star asked in a recent Editorial
  • "What could encourage an entirely new group of Essex County residents to come to the heart of the city? Closing streets and creating one big pedestrian mall downtown on weekends all summer long. It worked during the Detroit Grand Prix and the Red Bull air races, and we believe it should become the norm for weekends in the inner city. It's the best way to revitalize the core...

    Now is the time for the Downtown Windsor Business Improvement Association to approach city council to ask that streets in the core be closed to vehicular traffic this summer.

    We would suggest shutting down Ouellette Avenue between Riverside and Park streets, closing Chatham Street between Ferry and Goyeau, and also blocking University Avenue between Pelissier and Park.

    For those who worry, there will still be plenty of parking, but frankly, parking's not the issue. It's coaxing people out of their cars and on to the streets that's the problem. A pedestrian mall presents the perfect opportunity for merchants and restaurant owners to take it up a notch and showcase themselves. How they do it is up to them, but summer is a great time to experiment with new foods, new decor, new ideas.

    The benefits have been proven. We need to take full advantage of our great weather and our fabulous waterfront from now until Labour Day."

Of course events are needed to encourage people to come downtown. A Pedestrian Mall alone won't do it. People need a reason to come and not just once, but many weekends.

Naturally, the BLOGMEISTER had the answer even before the question was asked and presented this concept to the Downtown Windsor Business Improvement Association months ago:

Windsor Artsfest Weekends

DoubleClick here for details

When I worked and lived in London, England on a project for my former employer, I saw local artists every weekend hang up their paintings and sculptures for everyone to see (and even buy) on the fence around the park across the street from my hotel in Mayfair. I'd often go out and walk around for an hour or two looking at the works of art, some good, some not so good and would eat an ice-cream cone or other sweet as I enjoyed the time outside.

What could compare with our Riverfront or closing up our main street near the river for a few hours on the weekend to draw people there.

The costs are minimal but the opportunity huge.

Oh don't worry, nothing happened. Even with a major media sponsor and with a terrificly innovative idea how to attract Americans AND Canadians into the downtown at minimal cost, all I got was the run-around, being shuffled between DWBIA Committees.

Wasting thousands on streetscaping is a much better idea to attract the crowds.

The Square

Tuesday, May 11, 2010

Who Taught MDOT A Bad Lesson About P3s

Just hang in there, dear reader. I know that for some of you these BLOGs on P3s are excruciatingly boring.

And that is exactly the point.

Because you are not interested all that much, the Wall Street bankers are able to foist these ridiculous ideas on bureaucrats and legislators. They can sneak them in because they sound so inviting. Riskless, a no-brainer. And for bureaucrats, no nagging and annoying legislative oversight.

The end result though is that our taxes will increase skyhigh when we have to pay for these boondoggles. Remember the words “availability payments” when a school closes or a medical clinic cannot buy new equipment or when a police officer is laid off.

It has nothing to do with DRIC although MDOT and Canada have tried to combine both of them together. It has all to do with huge upfront banker fees, obscene P3 profits and gigantic taxpayer rip-offs.

Frankly, it is P3 cocaine as I said before. It corrupts the system: want jobs and $550M cash for a bridge and road project that you never have to pay back, pass P3 legislation.

What does a P3 operator contribute these days:
  • Finances---nope, the Government has to raise the bonds for the project
  • Expertise---nope, the same contractors that the P3 operator would hire can be hired by Government
  • Riskbearing----oh please, it’s built into the price.

Let me give you one example of what I found shocking. At the Michigan P3 hearings, MDOT Director Steudle told Legislators that the need for legislative oversight was NOT required on P3 projects, even a $5.3B one like DRIC. Why it would scare away private investors he said. They would go to some other State he warned.

Yea right, with guaranteed rates of return of 13-20% for 50+ years or more for a project like DRIC , they are not going anywhere Director.

I could not believe that he actually said this with a straight face. How could he have dreamed something up like this I wondered.

Then I found out how through the Magic of the Internet and Google. By chance I found an article that talked about Key Points for P3s. Here is a key question and answer

  • Q. Is prior legislative approval required when an individual PPP proposal is received?

    A. Private entities are less likely to be willing to incur significant proposal development costs due to the added uncertainty of whether legislative approval will thereafter be obtained.

Poor people. Perhaps that is why the Michigan P3 legislation also proposes that the State can pay them if they lose!

They Q&A was part of a document prepared by the law firm Nossaman Guthner Knox & Elliott. I did a background check on them and you will NOT believe what I found:

  • MDOT Signs Nossaman as Legal Adviser on DRIC

    Vanessa Buendia mentions Nossaman in the InfraAmericas article, "MDOT Signs Nossaman as Legal Adviser on DRIC." She reports that Nossaman was chosen as Michigan DOT's P3 legal advisor, after the agency issued a request for proposals. The article describes the Detroit River International Crossing as the first prospective project to be procured as a P3.”

Now I suspected who helped script the Director.

The firm even prepared a draft P3 Bill that I found. Guess what role the Legislature plays in that Bill. Nada, Ziltch, Nothing. The deal is between the P3 operator and a “public sponsor.” Here are some of the provisions...sound familiar:

  • "The Legislature intends that the powers granted to cities,local agencies, counties, special districts, regional transportation agencies, any department or agency of the State and any other agencies in this Act are in addition to any other powers authorized under applicable law...

    “Public private partnership” means any of the following types of agreements:
    1 (1) Agreements whereby the private partner assists the public sponsor in defining a feasible project and negotiates fair and reasonable terms for implementing
    the project; and
    (2) Agreements whereby the private party assumes responsibility for delivering, improving, operating and/or maintaining eligible facilities in accordance with established performance specifications and payment terms.

    "Public sponsor" means any department or agency of the State, any department or agency of a county, any cities, special districts, regional transportation agencies, any public corporation established under state law or county ordinance, joint powers authorities or any intergovernmental agency or corporation."

    Project delivery methods. Notwithstanding any other provision of state law, public sponsors are authorized to enter into public private partnerships for eligible facilities pursuant to this chapter.

    Procurement. (a) Notwithstanding any other provision of state law, the public sponsor is authorized to procure a private partner and award public private partnerships under this Act..

    The public sponsor is authorized to pay a stipend to an unsuccessful proposer, in an amount and on the terms and conditions determined by the public sponsor...

    Public-private partnership agreements. (a) In a public-private partnership, the public sponsor is authorized to include any provision the public sponsor determines necessary or appropriate."

Well, you get my drift.

I am NOT trying to be negative about the law firm. I believe the Nossaman firm CAN help the Michigan Legislators tremendously from a practical perspective about these types of deals. You see they worked on this deal:

  • "California Transportation Ventures – South Bay Expressway

    California Transportation Ventures – South Bay Expressway (SR-125)
    Nossaman served as special counsel, playing a critical role in the development of a 9.3-mile toll road and a 3.2-mile gap/connector project in San Diego, California as part of Caltrans' PPP program. Our work included developing and assisting with the plan of finance, assisting with procurement and contracting, defending the legality of the franchise agreement, negotiating with local agencies, acquiring rights-of-way, and obtaining and defending environmental permits.

    "South Bay Expressway

    Nossaman helped to make the long-awaited South Bay Expressway / SR 125 in Southern California - which opened on November 19, 2007 - a reality.

    Our attorneys advised the Expressway’s developer on a wide range of issues ranging from infrastructure and real estate to environmental, tax and related litigation...

    Macquarie funds took over the project from Parsons Brinkerhoff several years ago."

As you may recall

  • "South Bay Expressway company files for bankruptcy in San Diego

    South Bay Expressway (SBE) company filed for a reorganization in Chapter 11 US bankruptcy this week, writing off around $200m in shareholder equity. The equity held by Macquarie Atlas Roads in Australia and previously Macquarie Infrastructure Group had been heavily written down since the pike opened in November 2007 and was valued at zero ($0.00) in the financial reports from June 2009 onward...

    The project has also been afflicted by major ongoing litigation over huge claims made by Fluor/URS, the contractors who built the road but spent over a year longer than contracted at the job.

    South Bay Expressway (SBE) have spent $40m in legal fees defending against the builders' claims which at one point totaled $740m...

    Traffic and revenue forecasts underlying the financing plan for the SBE projected 60k vehicles/day in 2009 whereas traffic was in fact 23k/day, or 38% of forecast level.

    Toll revenue in 2008 was $22m or 70% of the forecast $31m.

    In 2009 toll revenue was $21m, about half of the $42m forecast."

Macquarie was one of the groups that responded to the MDOT/Transport Canada DRIC RFPOI weren't they? Did the MDOT people visit them when they went to Australia on their P3 trip?

And guess who did the traffic projections for this project:

  • "Wilbur Smith had done the investment grade traffic and revenue forecasts."

Yes that Wilbur Smith that MDOT hired and who did a "refresh" on a Canadain report that I do not believe has ever been made public and is the so-called MDOT investment grade traffic study and whose financial revenues the MDOT Director refuses to release publicly!

Yes, the Nossaman people can teach the Michigan Legislators why NOT to do P3s and how to kill the Bill. NOW! Now that is legal fee money well spent.

The Square

More Border Stories

The border stories never stop.


  • "It's the latest act in a saga that has seen costs triple, original designs discarded mid-project, contractors replaced and territorial officials hastening to Ottawa for a deal to allow the N.W.T. to increase its borrowing power.

    "It didn't all flow according to plan," concedes the territory's deputy premier and finance minister, Michael Miltenberger.

    Yellowknife MLA Dave Ramsay, a persistent critic of the project, puts it a bit more directly: "We were fooling ourselves and it came back and bit us pretty hard."

  • "The estimated $50-million cost would be paid through a $6 per tonne toll on commercial traffic...By 2008, the price-tag had grown to $150 million."

  • "Banks backstopping the project were growing nervous and demanded to see a detailed redesign by last Jan. 29. When they weren't satisfied, they declared a default, bringing the structure of the project crashing down."

  • "And now the territorial government is being forced to do what critics had warned about all along -- take over the project and assume the entire $165-million debt."


I still cannot figure out why we need P3s. It is almost as if Government people will do anything to make P3 operators piles of money. If I was a cynical person, I might say...follow the money.

Here is what I read from PPP Canada SUMMARY CORPORATE PLAN 2009-2014. That's Canada's P3 company--"PPP Canada was established in 2008 as a Crown Corporation with an independent Board of Directors reporting through the Minister of Finance to Parliament."

  • "Financial Crisis

    The impact of the financial crisis has been a dominant issue. It has reduced the number of players financing P3 projects – both equity and debt. This has been particularly pronounced with respect to debt, especially long-term debt. A number of European financial institutions that have been active in the Canadian P3 market have exited and others have reduced the lending caps to individual projects. This has created difficult challenges for closing projects, especially projects that were caught in mid-procurement during the financial crisis.

    PPP Canada consulted closely with provincial counterparts, Export Development Canada (EDC), Finance Canada and the private sector to understand the dimension of the issue and explore possible responses. At the federal level, the January 2009 Budget established the Extraordinary Financing Framework (EFF) and broadened EDC’s authorities for two years to include domestic projects. This enables both surety and financing support to P3 transactions. At the same time, provinces have pursued alternative financing models including British Columbia’s "wide-equity" approach, involving increased equity requirements but with the province providing the debt for projects.

    Financial market conditions have improved recently in terms of both liquidity and spreads but they have not and likely will not return to the credit conditions that existed pre-financial crisis. PPP Canada will continue to monitor and assess needs.


Silly me. I thought that Bill was all about P3s and whether Michigan should have them or not.

I am wrong. According to MDOT's Mohammed Alghurabi, Senior Project Manager

  • "As you know, we are currently awaiting a decision by the Legislature by June 1st on whether the DRIC project will get the go-ahead to proceed. HB 4961 is the bill that will allow the DRIC Project to move forward, and currently rests in the House and Senate Transportation Committees."

Oh yes, I forgot. If that Bill is passed, MDOT never needs to talk to the Legislature again over DRIC or any other one since there is no Legislative oversight on P3s.


We must mustn't we since we are prepared to loan $550M to the have-not State. Hardly:

    Canada’s Land Border Crossings are Key to Canada’s Security and Prosperity.
    Why the Lack of Urgency to Fix Them?
    What Will Happen If We Don’t?
    An Interim Report by the Senate Committee on National Security and Defence

    B. The Dirty Little Secret

    American leaders are very good at saying the right things in public...

    But when Committee members pressed a number of Michigan congressmen in Washington, D.C., they were candid in saying that, while they were being pressured by Canadians to reduce border uncertainty, they were not receiving any pressure from Americans.

    And Americans, of course, vote for them. Canadians don’t.

    Border uncertainty could well prove to be a cancer for the Canadian economy. The U.S. economy would also suffer from the shutdown of any major crossing – the figures on Page 48 show that. But there is a dirty little secret behind some U.S. politicians’ lack of interest in rushing to make Canada-U.S. land border crossings more secure, and it is this:

    Border uncertainty serves the interest of certain businesses and some local politicians in Michigan by making Canada a less attractive place to invest capital.

    If industry perceives the border crossings at Windsor-Detroit to be unreliable, then in time Canada will see negative impacts such as less investment, and even disinvestment. As Gerald Fedchun, President of the Automotive Parts Manufacturers' Association, said, “We don't think that perception is there just yet, but others can use the uncertainty against us.”

    The American mantra since 9/11 has been that national security trumps trade. But to some American communities that would like to see investment in Canada move south of the border, this may amount to patriotic talk that disguises where they would actually like to walk...

    This may well be in the interests of some American politicians whose constituencies are trying to attract outside investment that might otherwise go to Canada, or simply trying to protect their neighborhoods."

Wait a minute, I got it. MDOT does NOT want the border fixed up. They allowed the dumbest possible Bill to be introduced into the Michigan Legislature to allow P3s. They KNOW it has to be defeated and that would put the DRIC behind for ages thereby hurting Canadian trade.

Wow, Minister Baird, and Prime Minister Harper got played for suckers!


An interesting article in

  • Was Granholm appearance "orchestrated?"

    Was it all orchestrated?

    Did Michigan Governor Jennifer Granholm make it seem as if a shiny new offer from Canada’s government to build the DRIC border project was a last minute effort that could save Michigan financially just in the nick of time?

    That’s how Michigan state representative and Republican Marty Knollenberg sees it...

    He said the governor interrupted the presentation by the state’s transportation director and “within a couple of minutes she was gone.”

    But, he said, in the very same presentation, “they had reference to the fact that the Canadian authorities were going to commit to $550 million.”

    He called Granholm’s appearance “contrived” and “orchestrated to create a buzz” with the aim of putting pressure on those state legislators, sceptical of the deal, to vote in favour of DRIC."

Here is the slide referred to:


Thanks to MDOT spokesperson Bill Shreck, investigative journalists in Michigan need to find out:

  • "Governors and premiers and others aren’t just sitting around their office doing nothing.”

Here is a hint about what the Michigan Governor does:

  • "The latest overseas trip was Granholm's 10th since taking office in 2003. It won't necessarily be her last, said Granholm, who leaves office at the end of the year. She has traveled to Austria, Belgium, Germany, Israel, Japan, Jordan and Sweden."

I think she is checking out fares and hotels on and comparing itineraries with our globe-trotter, Minister Sandra Pupatello. I wonder if her hubby is asking his client, Windsor's Mayor Francis, to give him some tips given all the trips he has taken overseas.



  • "The Saint John Harbour Bridge Authority has awarded a contract for $32.6 million in repairs over the next two years.

    The outstanding issue of the bridge's debt and how its structural integrity will be maintained must still be addressed...

    At face value, this is a reasonable offer; but developments elsewhere in Canada have added weight to the provincial government's contention that Ottawa can do better.

    Provincial officials argue that the federal government has invested more than $400 million in the past four years on similar bridges in Quebec. In February, it emerged that Ottawa was negotiating to buy the Ambassador Bridge between Windsor, Ontario and Detroit, Michigan. And just last week, federal Transportation Minister John Baird offered a $550-million loan to the state of Michigan, to pay its share of the cost of a new international bridge."


Nice attempt by MDOT to try and sneak through a horrific P3 Bill by mixing DRIC up into it. That will turn out to be a huge blunder.

If you want to understand what some of the the issues around the P3 are all about, read this from Michigan Represntative Opsommer:


Coming in at #11 was the Ambassador Bridge Enhancement Project in the TRIP list of "Projects Vital to Michigan’s Economic Recovery."

Good thing it was not in the Top Ten considering that the meeting to announce the List was held at the Detroit Chamber's offices. They might have been upset given their DRIC support.

Lots of MDOT P3s are on the TRIP top 10 list too. Pure co-incidence no doubt.

P3 Bridge Fails---Government Forced To Take Over The Project

Oh yes, P3 projects are riskless for Michigan. Nothing can go wrong, go wrong, go wrong...

Just ask the Legislature in Northern Canada about their bridge project as it failed half-way through. Never mind the Port Mann failed P3 bridge project. It at least had not yet begun when Macquarie advised it could not raise the money required.

Let's see: behind schedule, overbudget, design flaws, receivership of contractor, borrowing limits being reached, onerous penalties, taking money from other essential risks here. A huge boondoggle originally budgetted at $50M, about 1/4 the final cost.
  • Deh Cho Bridge over budget
    The Hub, Northwest Territories

    Already one year behind schedule, the Government of the Northwest Territories announced Friday that the Deh Cho Bridge is now officially over budget.

    Government officials stated that the bridge, which will span the Mackenzie River near Fort Providence and replace both the Merv Hardie ferry and Mackenzie River ice crossing when completed, is now projected to cost $182 million – $15 million more than the original estimate.

    When a delay in the bridge’s opening was announced last year, government officials said they were confident changes in the bridge’s final design would provide enough savings to keep the project on budget, even with the delay. Those savings never materialized, Transportation Minister Michael McLeod told the legislative assembly on Friday. The extra cost will have to be covered by the GNWT for now, McLeod explained.

    “Right now we expect the $15 million is going to cover all the claims,” he said Friday. “It’s going to cover all the changes that we’ve had to make.”

    Hay River South MLA Jane Groenewegen said she had questioned the need for the bridge in the first place, even when it was budgeted as a $50 million, self-sufficient project during the 14th Assembly. With the project half-complete, Groenewegen said the project is “way past the point of no return.”

    Somebody wanted to leave this Territory a legacy,” she said. “We have been left a legacy all right. I don’t think we have even begun to see the end of it yet. We’ve been sold a bill of goods so many times already on this project that don’t worry, trust us, this is the limit of our involvement, just isn’t believable anymore.”

    Groenewegen said the GNWT now has three options: approve the $15 million appropriation, take the bridge debt onto the government books and operate the project as a government project, or mothball the project entirely. The second option would either push the GNWT over its debt limit or bankrupt it, Groenewegen said, while the third is simply not economically feasible.

    “The problem with that idea is that apparently the pillars would have to be removed,” she said. “That would cost more than it cost to put them there in the first place. Terminating the lending agreement that we are backstopping would also cost about $50 million in interest and penalties. That idea of stopping the bridge at this juncture is probably a non-starter.”

    Other regular MLAs also voiced their frustration with the news. Weledeh MLA Bob Bromley worried that the added cost would negative impact other government projects and “core social needs,” including daycare, early childhood education, and protecting the environment.

    “If we were a family, we would be getting close to living in the streets,” he said. “Our credit cards are maxed out. We poured our money into building a new garage when the house is falling down.”

    Kam Lake MLA David Ramsay said he has been extremely concerned with the project for a number of years.

    “The alarm bells were going off on this project and so-called partnership many years ago. The sad thing is not everybody was listening,” he said.

    “My guess is this project will cost close to $200 million by the time all is said and done and this is a complete and utter disaster of a project. The darkest days may yet be upon us and we continue to look at this project in this complete and utter boondoggle that the Deh Cho Bridge has become.”

    Finance Minister Michael Miltenberger said the $15 million in added costs could be recovered “through the tolls and all the other arrangements that have been signed as part of this deal.”

    “But going forward, because of this debt and other debt that we’ve agreed to accummulate as part of the current economic downturn, we are going to be going down in our borrowing limit,” he said. “In 2011-12, available borrowing capacity will shrink to about $85 million.”

    McLeod also announced Friday that the Deh Cho Bridge Corporation’s project managers, Andrew Gamble and Jivkov Engineering, have been replaced.

    “As a result of a number of discussions for the Deh Cho Bridge Corporation, we felt that we needed to bring in a new team to provide project management on this job,” he said. “We have since agreed and notified the people that were on the project management team that we will be bringing in a new company and new players to fill those roles. That has been accepted.”

Monday, May 10, 2010

Dead Men Don't Pump Gas But They Do Get A Salary

The urban legend of Edgar (aka Eddie) being a smart business person who can run this City as a successful business is falling apart piece by piece, day by day.

Oh don't take my word for it. Read what a business person who runs a City in a worse financial position than Windsor is in has to say about a situation about vacant jobs. From Detroit Mayor Dave Bing's recent Budget speech:
  • "This administration also promised to put an end to politics as usual and tell the truth, even when it wasn't popular. We've cut out all the unfunded vacant positions from this budget. The 2009-10 budget included more than 500 positions without a dollar to actually fill them. This is something past administrations used for political reasons, most notably in the police department to create the perception that there were more officers on the street than the City actually had on the force.

    Our citizens deserve to know the real numbers, without the phantom positions or the fuzzy math. As a businessman, I expect a real budget with real numbers and a plan that delivers real results."

In Windsor, it's worse. Vacant postions were funded unlike in Detroit. For years it seems.

I hate to tell you that we need ANOTHER investigation in Windsor but we do.

Creative book-keeping, what else can you call it.

Please do not tell me that I should believe one thing that I am told about our Budget and our so-called reduction in taxes. Department figures...hardly reliable now. Clearly they have been padded for years. Someone had to know about it but who? And what did they do about it?

Well mini-Gord found out and he told us:

  • "The critics claim there are no savings from eliminating empty positions at city hall. Not true, says Mayor Eddie Francis. Under Windsor's budgeting and spending procedures, each department is given an annual cash allotment based on its staff costs and other needs.

    So if an empty job is still on the books, the department gets the cash for that job on the assumption it will be filled later. If the position remains unfilled, the department gets to spend the extra cash on other stuff -- pending council approval, of course.

    That's the way most budgets work, in most governments and even most private companies. No manager in their right mind gives up staff complement willingly, or gives money back to the finance department. That's just not the way the game has been played ... until now.

    This year, managers throughout the corporation took the request for savings much more seriously than ever before, the mayor said this week. "Everybody was on board. It was really good," Francis said.

Nice to know that no one took saving money seriously before. Years of deception are being justified. What a shocking statement to make from a self-proclaimed business person. Would he have allowed HIS money to have been used this way?

It was all a game before. Those line-by-line so-called tough Budget sessions by the Councillors before, especially when the Councillor formerly known as Councillor Budget was in control, did not find anything wrong. Either they were incompetent or hoodwinked by their staff or both since positons were not filled yet money was being given out as if they were.

Read this misleading headline:

  • "Another 19 jobs erased at city hall"

Nope. here is what really happened:

  • "City council decided behind closed doors Thursday to chop another 19 full-time equivalent job positions to remain on target for a zero per cent municipal tax increase for the 2010 budget.

Imagine a schoolteacher in class asking a student this question and getting this answer:

  • Q. "What does your father or mother do for a living?
  • A. "Oh, my mother works in an "equivalent job position" at City Hall."

Now get this. It was tough cutting these equivalent job positions

  • "Councillors seemed content with Thursday’s closed-door decisions, saying many of the eliminated jobs are vacant or can hopefully be cut through attrition.

    “A number of these jobs have been vacant up to five years,” said Coun. Ron Jones. “They have been jobs on paper.

    “But certainly it’s a tough time and we had to make some tough decisions. I don’t agree with all the decisions that were made today, but majority rules.”

FIVE YEARS!!! Jobs on paper! What is going on here? How many millions of dollars have been wasted? How many daycare spaces could have been saved? Which managers have been fired for this?

Oh I get it. For five years certain Departments have told us lies. We thought they were getting money for real people who were working there but instead they were getting salaries for people who did not exist. They used the money for other purposes. We thought they actually were cutting money from their budgets but they weren't. They were using "salary" funds for those purposes.

What else is buried in the Budget figures that we do not know about!

The Square

The 20 Questions The DRIC Lobbyists Won't Dare Answer

Those DRIC lobbyists sure have fun answering their own questions. The problem for anyone wanting to understand what is going on with P3s, DRIC and the Michigan Legislature in light of Canada's $550M loan is that the DRIC lobbyists ignore key questions.

It should not be a surprise that this happens. It is because they have no answers. Or rather, if they answered the questions, then one would know that DRIC is a giant boondoggle exercise designed to put the Ambassador Bridge owner in a position where he has no choice but to sell out cheaply.

As for P3s, they dare not tell Legislators how much a DRIC P3 would cost compared with traditional Government financing, or any P3 either, for fear of being chased out of Lansing.

The biggest question, not included in the group of 20, that they are really afraid to answer is where has Governor Granholm been hiding on the border file? Oh she can fly all over the world for jobs, but an inexpensive helicopter ride (come on, driving takes waaaaay too long) from Lansing to Warren where the Bridge Co. has their HQ would have produced thousands of jobs many years ago. If you want theatrics, now that is good headline-making stuff. She could have been breathless getting out of the chopper.

Here is just one example produced by MDOT itself in 2006. Does the Governor even know this? Did she know what MDOT said? Did MDOT ever tell her? Does MDOT know what it said? Does MDOT care what it said? Does Jennifer realize how much she has cost her State by her inaction?

It looks like some people may be taking a closer look at the border file in Michigan and the DRIC-ites are getting concerned. Just as with the Canadian Senate, the DRIC controversy is not as much as a slam dunk as some Legislators were led to believe.

  • "Senator Dawson---At the beginning, when this bill came in we were led to believe, and I am not saying there was any bad faith, it was going to be a bill that would pass easily...

    All of a sudden we understand that there is an adverse effect for one of the strong participants in the bill."

  • "Senator Munson--I wish to echo the sentiments of Senator Dawson and Senator Mercer. This seemed to be slam dunk before."

Accordingly, the lobbyists in support of DRIC are stating:

  • "There is a deliberate misinformation campaign being waged against H.B. 4961, to block legislation that would allow public private partnership projects (including the Detroit River International Crossing project) to be built in Michigan. We all know the game – use a sliver of truth to mischaracterize the situation and then blow it out of proportion. We will answer rumors or attempts to spread other information that is not true."

Wow, my BLOGs are misinformation? I don't think so. I research them pretty carefully. I can read the English language. I can understand what statutes say considering my professional background. If my BLOGs can help block legislation that is potentially damaging to Michigan, I would be so pleased!

Perhaps, since they do not have anything better to do, the DRIC-ites could answer these questions:

1) Why are they afraid to call what Canada offered a loan when that is what Transport Canada Minister John Baird called it nad said it had to be repaid in full

2) Would another $550M of debt damage Michigan's financial position with the credit and ratings agencies? Would it be over the State's borrowing limit

3) What are the terms of that loan

4) What happens if toll revenues are insufficient to pay back the loan

5) Why did most of the P3 operators who responded to MDOT prefer the "availability payments" method ie Governments bear the risk of toll revenue deficiencies and NOT a toll revenue regime

6) Minister Baird said that Canada needed Michigan to pass P3 legisaltion. Why?

7) Is $550M the cost for someone to pay to get legislation passed or is it based on a percentage of the amounts involved ie DRIC project costs about $5.3B

8) If truck traffic is slightly over 3M trucks per year and the DRIC consultants say that the Ambassador Gateway Project itself can handle 5.4M trucks even before the latest border improvements, what is the urgency for DRIC today?

9) How many sections of the proposed P3 Michigan Bill take away legislative oversight and give control to MDOT: 1, 5, 10, 15, too many to count?

10) How many jobs will the $550M create in Michigan considering that Minister Baird sold it in Canada as reducing the high unemployment rate in Windsor/Essex

11) If the building a bridge will create jobs, how many jobs will the Ambassador Bridge Enhancement Project create

12) Has DRIC received its Presidential Permit to build a bridge yet

13) Where are the Wilbur Smith financial numbers and why is MDOT afraid to release them

14) Why are the Wilbur Smith traffic numbers "refresher" based on a Canadian Governmetn report which has never been released publicly?

15) Should one consider WSA to be unbiased considering that they advocated for DRIC in a paid advertisement

16) Why did the Peace Bridge GM say that the need for a new bridge in Buffalo is NOT to increase capacity but for traffic flow purposes. Isn't that the same argument being put forward here ["We’re building a bridge because it has to be part of the border system... we’re building it to make the border work better...That means accommodating all of the NEXUS and FAST needs...]

17) How many bridges can be used for trucks in the Buffalo/Niagara area considering that the "Whirlpool [bridge] into Canada is a dedicated commuter crossing under the NEXUS pre-authorized entry program," and "No commercial trucks" are allowed on the Rainbow Bridge.

18) How many truck Customs lanes are there in Buffalo/Niagara (Lewiston Bridge into the U.S 4 truck lanes. Into Canada, 3 truck lanes. Peace bridge into the US 7 truck lanes. Into Canada 4 truck lanes) compared with the Ambassador Bridge (Into the US, 13. Into Canada, 12 plus 6 built but not occupied)

19) If the lobbyists cannot even get the simplest of matters right, the DRIC website adddress--it is NOT --then what more complicated matters did they get wrong?

There are more questions to ask but that should keep the DRIC lobbyists busy.

Oh, one other question, number 20---how many of my questions will they answer?