ROAD MAINTENANCE SAVINGS DISPUTED

The Ontario government's program to outsource its highway maintenance work failed to produce the claimed savings for taxpayers, provincial auditor Erik Peters says. While the Ministry of Transport was targeting 5% cuts in the annual Cdn$243-million budget, it could not demonstrate savings, nor could it show government maintenance and safety standards had been met, he said. Peters' audit of four contracts totaling Cdn$93.1-million showed it would have cost the government Cdn$93.3-million to do the same work. The Ministry claimed operating savings of Cdn$2.7-million and one-time savings of Cdn$2.3-million in the contracts covering a fifth of the province's highways, for a Cdn$5-million or 5.2% saving in the contract value. Peters estimated increased operating costs of Cdn$2.1-million and identical one-time savings, for a gain of Cdn$200,000 or 0.3%. The Ministry disputed Peter's calculations, partly because the auditor failed to account for the cost of capital for machinery the ministry did not have to purchase. In its written rebuttal to Peters' report, the Ministry said "savings associated with subsequent awards indicate that the ministry's savings target for the complete outsourcing initiative (5%) is likely achievable."

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  • Corporate Authors:

    Public Works Financing

    147 Elmer Street
    Westfield, NJ  United States  07090-2433
  • Publication Date: 1999-11

Language

  • English

Media Info

  • Pagination: p. 31-32
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00781695
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jan 14 2000 12:00AM