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Sewage -- show us the money

The news that Greater Victoria's massive sewage treatment project will be more expensive to finance in the wake of the global credit crunch is worrying.

The news that Greater Victoria's massive sewage treatment project will be more expensive to finance in the wake of the global credit crunch is worrying. It makes it all the more essential that the federal and provincial governments live up to their promises and provide commitments on funding the project -- in writing.

Gary Morrison, vice-president of Ernst & Young, told Capital Regional District politicians they will have to look at shorter loan periods and rely on "more conservative" Canadian banks and lenders, instead of European players, to pay for treatment in the wake of the financial crisis.

The CRD hired Ernst & Young to help it prepare a business case for the province by the end of the year. A regional treatment system is estimated to cost between $1.2 billion and $2 billion, which could boost property taxes for homeowners by as much as $700 a year in some communities.

The provincial and federal governments have verbally committed to each pay one-third of the project. However, companies that might be interested in designing, building and operating future plants want written government commitments, which so far have not been forthcoming.

This is unacceptable, especially since the project is being forced on the region by the province. Without that mandate, the discussion might be centred on the question of whether the system is even necessary: Worthwhile arguments have been raised both for and against its construction.

But barring a sea change in government, sewage treatment is coming and the CRD needs cast-in-stone funding commitments. The regional district cannot build a viable business plan without knowing the size of the system government will ultimately fund.

Huge questions remain unanswered as the year-end deadline for a business plan looms. Will the CRD use a traditional funding model or go the public-private partnership route preferred by the province? The regional district must also decide whether to lump all the work together as one giant project, from pumps to plants to sludge. A large job leaves only a few North American companies as viable bidders, while numerous small contracts are more complicated but let B.C. and Canadian firms participate.

The CRD has received one extension from the province on the demand for a business plan; it is unlikely to receive another. Without firm funding commitments, however, the district has one hand tied behind its back.

With the federal government's support, the province was unwavering in its demand that Greater Victoria adopt sewage treatment. Those governments should be equally unwavering in honouring its promises to fund the project.