UnderstandingPublic Private Partnerships in Canada

John Gamble, CET, P.Eng.

OSPE Policy SeriesJune 1, 2011

ACEC Canada

• Association of Consulting Engineering Companies

• Leading voice for the business of consulting engineering in Canada

• Represents 500 firms across Canada• 12 provincial and territorial associations• Unapologetic advocate for members• No regulatory mandate

ACEC P3 task force

• ACEC recognizes P3s are here to stay• Need to educate ACEC members and

their clients• Much information available from different

sources• Opportunity to document “state of P3s” in

Canada and members’ experience with P3 projects

• Engaged Strategies 4 Impact! Inc. to assist with study

Objectives of report

• Identify opportunities and challenges, benefits and risks of P3s

• Identify best practices based upon Canadian experience with P3s

• Assist owners to determine when P3 or other delivery models will result in the most successful project outcomes

• Provide guidance to owners and to consulting engineering companies considering involvement in P3s

Key findings

• P3 is a valid form of project delivery when used in the appropriate circumstances

• But P3s are not a panacea • Owners must assess each project to

determine if a P3 will deliver greatest value for money

• Other models can deliver similar benefits (e.g. Qualifications-Based Selection)

• Advice from designers at project outset is an investment in project success

Key findings (cont’d)

• Greatest benefit of P3s generally occurs when private sector maintains and 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'

Advice for owners: P3 or not?

• Assemble qualified team knowledgeable about P3, including owner's engineer

• Educate decision-makers within owner's organization on P3

• Develop a comprehensive business case• Compare benefits/risks of P3 to other

delivery models• Perform value for money analysis• If the analysis supports P3, determine

most appropriate model

Advice for owners on P3s

• 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 of project outcome

• Where maintenance and/or operations are part of the P3, ensure performance criteria meet owner's needs

• Monitor and audit compliance

Advice for consultants

• Develop a comprehensive business case before engaging in P3s

• 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 P3s• Consider pursuit costs and compensation• Protect your intellectual property rights

Advice for consultants

• Negotiate terms and compensation appropriate to the scope of services and risk

• Ensure project management processes are in place and adhered to

• Ensure that quality management processes are in place adhered to

• Exercise and stand by professional judgement if questioned or challenged

• Remember who is your client and what is your role

Closing thoughts

• ACEC is neither for or against P3s – but recognizes P3s are a fact of life

• Do not assume that P3 is THE solution• P3s do NOT create “free” infrastructure• There are many variations of P3s• Assess all applicable delivery models,

including conventional delivery• Remember, design consultant is not

owner’s agent in a P3• Don’t give away services or IP for free• NEVER forget the end user!

Acknowledgements

• François Plourde, CIMA+ (Task Force Chair)• Walter Orr, FSC Architects & Engineers• Roland LeBlanc, Acadia Consultants &

Inspectors Limited• John Collings, Collings Johnston Inc.• John Fussell, Associated Engineering• Andy Robinson, ACEC Chair (2009-2010)• John Gamble, ACEC President• Brian Watkinson, Strategies 4 Impact! Inc.

The reportUnderstanding Public Private Partnershipsin Canada

• Why P3s?• P3 models in Canada• Opportunities/benefits• Risks/challenges• The P3 process• Roles for owners/consultants• Additional resourcess

www.acec.ca www.strategies4impact.com