Public Private Partnerships: The Canadian Experience

Transcription

1 Public Private Partnerships: The Canadian Experience John Gamble, CET, P.Eng. President & CEO ACENZ / CFNZ / RNZ Joint Conference Rotorua, New Zealand August 6, 2014

2 ACEC Canada Association of Consulting Engineering Companies Leading voice for the business of consulting engineering in Canada Represents 450 firms across Canada Federation of 12 provincial and territorial associations Collaborates with national stakeholders Unapologetic advocate on business, regulatory and public policy issues No regulatory mandate

3 Canada at a glance

4 Canada at a glance "Kanata" in Iroquois meaning "village Confederation of 10 provinces, 3 territories Spans six time zones Area = 9,984,670 km 2 (2 nd ) Population = 35,500,000 (36 th ) GDP = $1.717 trillion CAD $1.00 CDN = $1.07 NZD

5 PPP experience in Canada 20 years of history with PPP in Canada 211 projects as of July 2014 o 120 in operation o 49 under construction o 42 in procurement Projects valued at over $65 Billion Range from $1 Million to $4.25 Billion Average project value is $414 Million

6 PPP experience in Canada Sector Number Value ($B) Transportation Hospitals & Healthcare Justice & Corrections Energy Education Recreation & Culture Real Property Defence Environmental Government Services IT Infrastructure 2 <0.1 Total 211 >65

7 Confederation Bridge, New Brunswick/Prince Edward Island

8 Forms of PPP projects Source: The Canadian Council for Public Private Partnerships

9 Canada Line, Vancouver, British Columbia

10 ACEC PPP study ACEC recognizes PPPs are here to stay Need to educate ACEC members and their clients Information is available from different sources Opportunity to report on state of PPPs in Canada and members experience with PPP projects Engaged Strategies 4 Impact! Inc. to assist with report: Understanding Public Private Partnerships in Canada

11 ACEC PPP study Understanding Public Private Partnerships in Canada Why PPPs? PPP models in Canada Opportunities/benefits Risks/challenges The PPP process Roles for owners/consultants Additional resources

12 Bridgepoint Health Centre, Toronto, Ontario

13 Key findings PPP is a valid form of project delivery when used in the appropriate circumstances But PPPs are not a panacea Must assess each project to determine if PPP will deliver best value for money Other models deliver similar benefits (e.g. Quality-Based Selection) Advice from designers at outset is an investment in project success

14 Key findings (cont d) Greatest benefit of PPPs generally occurs when private sector maintains/operates the asset for 25 or more years Best results are achieved through fair sharing of risk and reward Success is highly dependent upon having the right team Owners must be diligent in assessing qualifications of the team they are making a 'leap of faith'

15 It s all about risk Consortium is responsible for schedule/budget Owners expect warranties & liquidated damages Significant risks downloaded to consultant Beware of third party or other uninsurable risks But risk can be a business opportunity if o Your risks are well understood o You have the technical, managerial and contractual ability to manage or mitigate risk o You are fairly remunerated for your risk PPP is not for the faint of heart!

16 Durham Region Provincial Courthouse, Oshawa, Ontario

17 Advice for owners Assemble qualified team knowledgeable about PPP, including owner's engineer Educate decision-makers within owner's organization on PPP Develop a comprehensive business case Compare benefits/risks of PPP to other delivery models Perform value for money analysis If the analysis supports PPP, determine most appropriate model

18 Advice for owners (cont d) Run a competitive and fair procurement process Compensate pursuit costs to encourage participation (Proposals are expensive) Ensure project agreement is comprehensive: clear definition of roles, responsibilities, scope and deliverables Conduct a post-construction evaluation Ensure performance maintenance and/or operations criteria meet owner's needs Monitor and audit compliance

19 Communications Security Establishment Canada Long-Term Accommodation Project, Ottawa, Ontario

20 Advice for consultants Develop a comprehensive business case before engaging in PPPs Carefully assess risk and reward Investigate insurance needs and availability of coverage Carefully assess team members including the consortium and owner Assess necessary resources, knowledge and experience to manage fast pace of PPPs Consider pursuit costs and compensation Protect your intellectual property rights

21 Advice for consultants (cont d) Negotiate terms and compensation appropriate to the scope of services and risk Adopt and adhere to robust project management processes Adopt and adhere to robust quality management processes Exercise and stand by professional judgement if questioned or challenged Remember who is your client and what is your role

22 Municipal Water & Wastewater System, Goderich, Ontario

23 The most important advice? Choose the right Team! You will have to live with each other for a long time

24 Athletes Village, 2015 Pan Am Games, Toronto, Ontario

25 Closing thoughts PPPs are now a fact of life Do not assume that PPP is THE solution PPPs do NOT create free infrastructure Assess all applicable delivery models, including conventional delivery Remember, design consultant is not owner s agent in a PPP Allocate risk and reward fairly Don t give away services or IP for free NEVER forget the end user!

26 Maison Symphonique de Montréal, Québec

27 Thank you!