The Canadian Council for PublicPrivate Partnerships The Canadian
The Canadian Council for Public-Private Partnerships The Canadian Experience Mark Romoff President & Chief Executive Officer Zagreb, Croatia January 27, 2014
Infrastructure Investment The Global Challenge 2
Global Infrastructure Deficit $57 trillion Roads $16. 6 TN Power $12. 2 TN Water $11. 7 TN Telecommunications Rail $9. 5 TN $4. 5 TN Airports $2. 0 TN Ports $0. 7 TN Source: Mc. Kinsey Global Institute, “Infrastructure productivity: How to save $1 trillion a year”, January 2013 3
Infrastructure Investment • Drives Jobs • Drives Growth + Prosperity • Drives Global Competitiveness But some realities. . 4
Infrastructure Challenge Infrastructure Deficit + Fiscal Reality ≈ P 3 5
Canadian PPP Market 6
Canadian PPP Overview • 20 year history • 206 projects • $63. 6+ Billion 7
PPP Projects by Location Province Ontario British Columbia Québec Alberta New Brunswick Federal Manitoba Saskatchewan Nova Scotia Nunavut Newfoundland & Labrador Northwest Territories Total Number 101 35 18 17 10 9 5 4 3 2 1 1 206 8
PPP Projects by Sector Transportation Hospitals & Healthcare Justice/Corrections Energy Education Recreation & Culture Real Estate Defence Environmental Government Services IT Infrastructure Total Number* 44 78 19 5 10 17 3 1 22 5 2 206 * Includes projects with committed PPP Canada funding that have not gone to RFQ yet. ** Includes only actual cost figures released after financial close. Value ($B) ** 26. 4 21. 5 5. 4 4. 3 1. 9 1. 4 0. 9 0. 7 0. 2 0. 0 63. 6+ 9
Transportation Projects Sector Roads & Bridges Public Transit Airports & Civil Navigation Highway Service Centres Total Number* 26 13 3 2 44 * Includes projects with committed PPP Canada funding that have not gone to RFQ yet. ** Includes only actual cost figures released after financial close. Value ($M) ** 20, 661 3, 444 1, 933 382 26, 420 10
Healthcare Projects Sector Hospitals Long Term Care Children and Youth Services Total Number* 68 9 1 78 * Includes projects with committed PPP Canada funding that have not gone to RFQ yet. ** Includes only actual cost figures released after financial close. Value ($M) ** 21, 017 467 21, 484 11
Environmental Projects Sector Water & Wastewater Landfill & Energy from Waste Total Number* 17 5 22 * Includes projects with committed PPP Canada funding that have not gone to RFQ yet. ** Includes only actual cost figures released after financial close. Value ($M) ** 354 301 655 12
Municipal PPP Projects by Sector Recreation & Culture Transportation Environmental Hospitals & Healthcare Total Number* 13 11 20 1 45 * Includes projects with committed PPP Canada funding that have not gone to RFQ yet. ** Includes only actual cost figures released after financial close. Value ($M) ** 909 706 579 47 2, 242 13
PPP Projects by Status 14
PPP’s: What Are They? 15
What is a PPP? It goes by many names (P 3, PFI, AFP) • PPP’s are alternative procurement model for government infrastructure to traditional design / construction • A single entity (“Project Co”) contracts with government and in turn contracts with consortium partners • The private sector accepts responsibility for Design, Construction, Financing, Maintenance and in some cases Operations • The facilities management component covers a long term concession period (25 – 35 years) with pre-defined hand back conditions • Contracting arrangements are performance based – Payment from Government only begins upon completion of construction – On-going payments remain subject to deduction for failures in service delivery 16
Models of PPP in Canada Source: The Canadian Council for Public Private Partnerships 17
Top Ten P 3 Myths 1. P 3 s mean privatisation 2. P 3 s mean loss of public control 3. P 3 s are more expensive 4. P 3 s are bad for small contractors 5. P 3 s are bad for local contractors 18
Top Ten P 3 Myths 6. P 3 s are secretive 7. P 3 s maximise private sector profits 8. The public sector is on the hook if things go wrong 9. Unions do not like P 3 s 10. The general public does not like P 3 s 19
Canada’s P 3 Model – Best in Class 20
Canadian P 3 Results • On Time • On Budget • Less Cost (Value for Taxpayers) • 290, 680 Direct Jobs (2003 -2013) • $48. 2 B Contribution to GDP (2003 -2013) 21
Canadian P 3 Agencies • Federal – PPP Canada Inc. • Provincial – Infrastructure Ontario – Partnerships BC – Alberta Infrastructure – Infrastructure Québec – Partnerships New Brunswick – Sask. Builds 22
The Canadian Model – Best in Class • Political & Public Sector Champions • Favourable Legislative Environment • Value for Money • Risk Identification and Sharing • Whole of Life Costing • Lifecycle Maintenance • Performance-based Contract 23
The Canadian Model – Best in Class • Fixed Price/Non Performance Penalties • Competitive Procurement • Procurement Process Efficiencies • Transparency & Fairness • Reliability - Commitment to the Model • Well Developed Bond Market/Deep Capital Markets • Labour Transition Provisions 24
Taking Partnerships Global 25
Taking Partnerships Global Location: Melbourne, Victoria, Australia Value (NPV): A$1 billion Financial Close: 16 December, 2011 Completion Date: Early 2016 Duration: 25 years Public partner Victorian Government The Victorian Comprehensive Cancer Centre (VCCC) Private Partner Plenary Group (sponsor and investor) Grocon and PCL (Construction JV) Honeywell (facilities/ maintenance manager) 26
About CCPPP 27
CCPPP Mission To promote innovative approaches to infrastructure development and service delivery through public-private partnerships with all levels of government 28
Who We Are • Founded in 1993 • Non-profit • Non-partisan (Public and Private Sectors) • Member-sponsored • National Representation • International Members • Honorary Chair – Alberta Premier Alison Redford 29
What We Do • Promote collaborative partnerships between public sector agencies/departments and industry • Educate stakeholders and the community on the economic and social benefits of P 3 s • Advocate for evidence-based public policy in support of P 3 s • Facilitate the adoption of international best practices • Promote Canada’s P 3 model and expertise globally 30
Our Focus • Strategic Partnerships • Education & Training • Research Program • Cross-Canada Events • Annual Conference 31
Our Focus • National Awards for Innovation & Excellence in PPPs • Case Studies • Next Generation Leaders (YLI, WIN) • Project Database • Opinion Poll 32
Publications 33
CCPPP National Conference Mark your calendars: P 32014 November 3 & 4, 2014 Toronto 34
The Canadian Council for Public-Private Partnerships @markromoff www. pppcouncil. ca @pppcouncil
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