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Making his most significant policy reversal since taking office, Premier Gordon Campbell announced yesterday that British Columbia would not proceed with plans to privatize the Coquihalla Highway.

The decision ends a project expected to have raised between $500-million and $600-million for the government through a lease arrangement that would have put the toll highway in private hands for 55 years.

"We have listened to local residents and our caucus members," Mr. Campbell said in Victoria. "The current tolls will remain and will not be increased and the Coquihalla won't be leased to a private operator."

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The surprise announcement came after a concerted public relations effort by the government failed to win public support for the plan.

The proposal to lease the Coquihalla met widespread opposition when it was revealed last spring. Criticism was particularly strong in Kamloops and Kelowna, the two terminal cities on the highway, which divides at Merritt, after passing through the Coast Range Mountains from Hope.

Mr. Campbell was a stout defender of the Coquihalla plan, arguing that it made economic sense.

Yesterday, he admitted that his government was backing down because it had not been able to sell the project to the public.

"We had a good business plan that made a poor public case. It's time to put that plan behind us and move on - and that's what we're going to do," said Mr. Campbell, who was elected two years ago, promising, among other things, to pursue private-public partnerships.

The Coquihalla opened 17 years ago to coincide with the Expo 86 world's fair in Vancouver. It cut the driving time between Vancouver and the Okanagan Valley to about three hours from 5½, providing a big boost to tourism.

When the privatization plan was announced, Interior cities rallied against it, saying it would hurt their economies and leave them at the mercy of a private company, which might increase tolls repeatedly.

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"It's great news," Rich Denis of the Kamloops Chamber of Commerce said of the government's announcement.

"When I heard, I was shocked. But I think that was the right decision to make. It's the best decision for B.C."

Mr. Denis said people in Kamloops were solidly opposed to the plan and they made sure their local MLAs, all Liberals, heard the message.

"Right from the start there was 90 per cent opposition to the plan," he said.

"Privatization isn't necessarily a bad thing for the government to do, but you really need to pick your projects. When you talk about privatizing taxpayer-supported infrastructure, you feel they are taking something away from you that is yours. That's why the government could never sell this plan."

Paul Landry, president of the British Columbia Trucking Association, said he was glad the government backed down.

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"We're very pleased and full credit to the government for listening," he said.

"I think, obviously, there was considerable pressure from the public, from organizations like ours, from MLAs in the region, from other parts of the province. Given that degree of resistance, I had anticipated the government would step away from this proposal. But, if anything, I'm surprised it happened this quickly."

Ron Cannan, a city councillor in Kelowna, said he was overjoyed by the news.

"It's a great day. Thank you Mr. Campbell for listening to the people."

Mr. Campbell's Liberal government, which holds all but two seats in the legislature, has stuck with controversial policy decisions in the past, even in the face of massive protest rallies. One notable exception was when the Premier relented on a plan to rescind seniors' bus passes. By contrast, however, the Coquihalla was a major government initiative meant to showcase its push for privatization.

"I think it's maybe humbling to the Premier, but I give him credit for listening, and retracting," Mr. Cannan said.

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