Public-Private Partnerships in Saskatchewan: A Tale of Two Upgraders
Date
2014-04-24
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
ORCID
Type
Degree Level
Masters
Abstract
Stobbe, Mark Jacob, M.A. University of Saskatchewan, Saskatoon, Canada, February 2014.
Public-Private Partnerships in Saskatchewan: A Tale of two Upgraders.
Most of the literature dealing with public-private partnerships (P3s) examines the impact of private sector involvement in the provision of infrastructure or services normally provided by the public sector. This thesis uses the two case studies of the NewGrade Heavy Oil Upgrader and the Bi-Provincial Heavy Oil upgrader to examine the dynamics of P3s entered into by government in a market-driven, commercial sector for the purposes of promoting economic development.
In the 1980’s, there was a political consensus in the Saskatchewan legislature that the province needed upgrading capacity to convert heavy crude oil into more marketable and valuable light synthetic crude and that the upgraders should be built through P3s. The result was the creation of the NewGrade and Bi-Provincial Upgraders. In the 1990’s, financial losses at both upgraders caused the Saskatchewan government to demand renegotiation of these partnerships. The thesis examines these partnerships in their initial negotiation, construction/operation and renegotiation in order to determine what environmental factors and internal dynamics contributed to the success or failure of the partnerships and the relations between the partners.
The thesis argues that the upgraders successfully achieved their public policy objectives and gained the benefits of synergies arising from the differences between the public and private sector. However, the partnerships came under severe stress arising from a prolonged downturn in oil markets and the price of crude oil. The resulting financial losses caused the Saskatchewan government to seek a renegotiation of the terms of partnership. Despite this common cause of stress in the partnerships, the renegotiations of the agreements varied greatly. It is demonstrated that these differences arose from the financial structure of each partnership, the nature of the private sector partners and the number of partners involved in the project. The thesis provides some observations of potential value for governments and corporations considering entering partnerships for economic development projects. The differences between partners that can create synergistic benefits can also be the basis for the erosion of trust between the partners. The different financial tools used by government to participate in P3s can have significant impacts on both project viability and relationships between the partners.
Description
Keywords
Public-Private, Partnerships, Saskatchewan, Politics, Devine, Romanow, Husky Oil, Federated Co-operatives Limited, Heavy Oil, Upgraders, Economic Development
Citation
Degree
Master of Arts (M.A.)
Department
Interdisciplinary Studies
Program
Interdisciplinary Studies