Title: UBC P3 Project Phelps Centre for the Study of Government and Business, UBC Public Private Partnershi
1UBC P3 ProjectPhelps Centre for the Study of
Government and Business, UBCPublic Private
Partnerships The Ontario Scene in 2006 A.
Scott CarsonQueens School of BusinessQueens
University
2The Politics
- Current generation of Ontario P3s started with
William Osler Health Centre and Royal Ottawa
Hospital - 2003 McGuinty government
- Political problem of baggage on P3s
- Link with privatization
- Union resistance
- Faced 30 billion infrastructure deficit on
provincial infrastructure of 250 billion - Created Alternative Financing and Procurement
model (AFP) - Similar to UK Private Finance Initiative (PFI)
3Ministry of Public Infrastructure Renewal
- Review, evaluate and recommend plans submitted by
ministries - Overseeing implementation of the Governments
annual infrastructure budget - Develop sector-specific infrastructure strategies
4- Negotiate with Government of Canada on
cost-shared infrastructure programs - Coordinate delivery of infrastructure programs
through Ontario government ministries - Determine most effective financing and
procurement strategy - Develop growth plan for Ontarios Greater Golden
Horseshoe and other parts of the province
5Infrastructure Ontario
- Arms length crown corporation reporting to
Minister for Public Infrastructure Renewal - renewal of the provinces hospitals, courthouses,
roads, bridges, water systems and other public
assets - Alternative Financing and Procurement (AFP)
- appropriate public control and ownership
- on time and on budget
- Loans to municipalities, universities, public
bodies to build and renew public infrastructure
6- Large complex projects construction financed and
carried out by private sector - Infrastructure projects guided by
- Public interest is paramount
- Value for money must be demonstrable
- Appropriate public control and ownership must be
preserved - Accountability must be maintained
- All processes must be fair, transparent and
efficient - 3. reflects a political promise by the current
government. Others are governance principles that
the predecessor government supported.
7ReNew Ontario Program
- 2005-10 30 billion
- Hospitals 5 billion
- Schools, universities, colleges 10 billion
- Affordable housing 600 million
- Justice 1 billion
- Other 2 billion
- Transportation 11.4 billion
- Take note
8The People
- Ontarians agree that governments cant keep pace
with infrastructure - Increasing acceptance of P3s
- Still below rest of country for P3s in
health/hospitals sector - Environics Poll for Canadian Council for Public
Private Partnerships in 2006 - Three slides
9Governments are having trouble keeping pace with
demands for new or improved infrastructure and
services
Do you Agree? Yes.
Ontario in line with the other regions
10Support P3 hospital financing and construction.
Agree? Yes.
Ontario 10 below British Columbia and 21 below
Quebec. Ontarians agree government cant keep
up, but weak and weakening support for hospital
P3s.
11Support P3 financing and construction in Ontario.
Agree? Yes.
Only water and sewers concern Ontarians more than
hospitals for P3s
12The Projects
- Projects Under Construction
- Montfort Hospital BF
- Request for Proposals Closed - Bids Under Review
- Durham Consolidated Courthouse DBFM
- North Bay Regional Health Centre DBFM, 25 yrs
- Quinte Health Care BF
- St. Josephs Health Care - London
- Sunnybrook Health Sciences Centre
- Trillium Health Centre BF
- Request for Proposals Open
- Sarnia Bluewater Health BF
- Sault Area Hospital DBFM, 25 yrs
- Sudbury Regional Hospital BF
- Youth Justice Facility BF
- Request for Qualifications Open
- Hamilton Health Sciences (3 projects) BF
- Pre-Tender
- Bridgepoint Health DBFO
- Centre for Addiction and Mental Health
- Credit Valley Hospital
- Halton Healthcare Services
- Humber River Regional Hospital
- Kingston Cancer Centre
- Kingston General Hospital
- Lakeridge Health
- Markham Stouffville/Toronto Grace Hospital
- Ottawa Hospital
- Royal Victoria Hospital
- St. Josephs Health Care - Hamilton
- St. Josephs Health Care - Parkwood Mental Health
- Toronto Rehabilitation Institute
- Waterloo Region Courthouse
- West Lincoln Memorial Hospital
- Windsor Regional Hospital
- Womens College Hospital
13Notables
- Infrastructure Ontario has 36 projects. All but 3
are hospitals! - Ontario support for P3s, not strong for hospitals
in Environics Poll - Visit any hospital website on project list
strong community pride in healthcare facility
project fundraising - ReNew Ontario 2005-10 30 bn
- 11.4 bn earmarked for transportation
- No transportation deals listed by Infrastructure
Ontario
14Deal Structure and Risk Transfer
- Two kinds of structure
- Build Finance
- Construction risk transfer
- Fixed price
- On time and budget
- Improvement on traditional procurement (progress
payments) - Government cost of capital lower, but on time and
on budget provides offsetting value
15- Design, build, finance, maintain
- Construction risk transfer is significant
- Management risk is moderate
- Operator cant achieve many economies
- Public sector employee rights ensured
- Back-end risk transfer significant
- hand-back contract provisions require asset
quality - Operators price life-cycle maintenance into
contracts
16Concluding Notes
- Significant evolution in government thinking
- Recognition that government borrowing rate isnt
the only relevant financial consideration - Understanding the life-cycle financing must be
planned - Future construction capacity issue
- 30 projects next 2-5 years
- Large contractors may reach capacity limites
- Smaller contractors less leverage with trades
- UK, Europe contractors busy
- US appears ready to take off
17- Next priority likely transportation, but no
concrete indications of when - Extension of Hwy 407
- 400 series hwy improvements
- Niagara mid corridor