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Bundling Projects – The Alberta Schools Experience

Bundling Projects – The Alberta Schools Experience. Kees Cusveller Saskatchewan P3 Summit 2014 September 9, 2014. Typical P3 Arrangement. Direct Lender Agreement. Gov’t Agency. Lenders (Debt). Availability Payments. Capital Contribution. Concession. Agreement. Investment.

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Bundling Projects – The Alberta Schools Experience

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  1. Bundling Projects – The Alberta Schools Experience Kees Cusveller Saskatchewan P3 Summit 2014 September 9, 2014

  2. Typical P3 Arrangement Direct Lender Agreement Gov’t Agency Lenders (Debt) Availability Payments Capital Contribution Concession Agreement Investment Private Private Contractor (SPV) Finance Operating Subcontractors Sponsors Design Build Operate Maintain (Equity)

  3. History • Bird/Graham ASAP 1 18 schools Opened Sept 2010 • Bird/Graham ASAP 2 10 schools Opened Sept 2012 • Clark/Turner ASAP 3 12 schools Opened Sept 2014

  4. Bird/Graham Joint Venture • 50/50 integrated design build JV • Joint and several • JV banking, subcontracts, project office

  5. Facts and Figures ASAP 2 • 10 schools • 6 school boards • Several municipalities • Several designs ASAP 1 • 18 schools • 4 school boards • 2 cities • 3 core designs

  6. Facts and Figures (cont’d) ASAP 2 • 142 modulars • 8,000 students • 600,000 total square feet • 24 month design and construction schedule ASAP 1 • 218 modulars • 12,000 students • 900,000 total square feet • 21 month design and construction schedule

  7. Bundling Advantages • Economies of scale • Prototype reduces errors • Better planning • Efficient work flows/approvals • Strong teams

  8. Bundling Disadvantages • All or nothing procurement • Subtrade risk management • Can have 1 error repeated numerous times • Reduces innovation • Binary performance requirements

  9. Bundling Opportunities • Cost effective projects • Life cycle inclusion is critical • Improved commissioning process • Cost/scope/time certainty

  10. Bundling Challenges • Managing multiple owners and user groups • Ineffective risk transfer • 4th ‘P’ is politics • Steep learning curve • Single supplier constraints • Outside parties need to be on side

  11. Lessons Learned • Need the right partners • Political will to proceed • Economies of scale versus risk management • Importance of life cycle costing

  12. Bundling Projects – The Alberta Schools Experience Questions??

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