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Understanding Public Private Partnerships in Canada

Understanding Public Private Partnerships in Canada. John Gamble, CET , P.Eng. OSPE Policy Series June 1, 2011. ACEC Canada. Association of Consulting Engineering Companies Leading voice for the business of consulting engineering in Canada Represents 500 firms across Canada

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Understanding Public Private Partnerships in Canada

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  1. UnderstandingPublic Private Partnerships in Canada John Gamble, CET, P.Eng. OSPE Policy Series June 1, 2011

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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'

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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!

  12. 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.

  13. The report Understanding Public Private Partnerships in Canada • Why P3s? • P3 models in Canada • Opportunities/benefits • Risks/challenges • The P3 process • Roles for owners/consultants • Additional resourcess www.acec.cawww.strategies4impact.com

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