Interest vs. federal grant

It is unclear what level of risk, if any, the private sector partners are accepting in the Stave Lake water project.

It is unclear what level of risk, if any, the private sector partners are accepting in the Stave Lake water project.

What is clear is that Abbotsford water users are paying the private sector partners a three per cent interest premium to borrow $95 million, and a premium to operate the water system for 25 years.

The basic money question surrounding the P3 model comes down to:  is the present value of the premium paid to the private sector to borrow their money and operate the system, more or less than the $60-plus million federal grant?

The answer to this question would be very helpful to Abbotsford voters.

 

Mark Robbins