Monday, May 21, 2012

Exclusive: Libs keep lid on privatization plan

British Columbia Finance Minister Kevin Falcon revealed on Feb. 21 that the B.C. Liquor Distribution Branch's warehousing and distribution would be privatized. I reported on that day in Business in Vancouver that this was a priority for B.C. Liberal-connected lobbyist Patrick Kinsella and his client, Exel Logistics.

Then I became curious. What is the business case for this? Does a cost/benefit analysis exist? Is this a good deal for taxpayers?

On May 17, I got my answer. It is not satisfactory to me and it should not be satisfactory to you.

I received a Dec. 5, 2011 report to Cabinet and a Jan. 18, 2012 report to Treasury Board. Both are heavily censored and only contain information that is already in the public domain, via LDB service plans and financial reports. Bottom line: the government is keeping secret the reasons to justify selling off a key part of a profitable public asset. That is, if it has reasons to justify the measure beyond making Kinsella and his fellow lobbyist Mark Jiles happy.

Before you read the full FOI release at bottom, I want you to compare these two documents first.

"Exhibit 1" (with the Exel letterhead) is an excerpt from the Oct. 6, 2009 "Last Spike" internal memo by Exel Logistics vice-president Scott Lyons. The memo was Exel's playbook on how it wanted to privatize the B.C. Liquor Distribution Branch's warehousing and distribution. "Appendix C" is from the Cabinet documents, released under my FOI request.

Except for the headlines, both the Exel memo and the Cabinet submission employ an eerily similar font and warehouse icons.

The question I have is this: why would the B.C. cabinet have a document that looks (to my eyes, at least) so similar to one contained in an internal memo previously created by the company that has spent so much time lobbying the government to privatize liquor logistics?

BCLDB Model Mackin

Here are the heavily censored Cabinet and Treasury Board documents.

Heavily censored cabinet reports on liquor distribution/warehousing privatization

Read my full coverage in Business in Vancouver to learn more about this developing story:

May 8: Logistics giant targets lucrative LDB contract

May 15: NDP blasts liquor privatization process

May 15: Alberta’s experience: product diversity booms, costs balloon

May 22: Industry irked over Liberals' push for liquor privatization

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