Building The Future Through Public-Private Partnerships
Insight A look into the role that P3s play when it comes to assessing and addressing the next generation of infrastructure needs across North America.
he 1950s and 1960s saw an exponential growth and development of major infrastructure in Canada and the United States. The post-war push to build transcontinental highways, cross-border bridges, and the St. Lawrence Seaway set North America on a path of prosperity and productivity for the 20th century.
A half a century later, we haven’t kept up with the need to invest in infrastructure. All levels of government currently face infrastructure deficits; in some cases they are also challenged by staggering deterioration of vital public assets.
Commitment to change
The good news is administrations of all political stripe, have recognized the need to invest in publicly owned infrastructure. Canada’s new federal government has announced historic funding commitments, and both of the major presidential candidates in the United States have included infrastructure spending as a major part of their campaign platforms.
But, given the current political climate, given the public weariness with overspending and waste, and given the size and complexity of the projects being discussed and considered, it is safe to expect the public-private partnership approach (P3) will have to play a significant role when it comes to assessing and addressing the next generation of infrastructure needs across North America.
Innovation in a P3 project is often what drives real value for money.
Canada leads the way in the current P3 market. The model has evolved over the past 25 years to the point where dozens of international fact-finders have studied the Canadian approach in order to execute it in their jurisdictions. While the model may not be as mature south of the border, the general view seems to be not if but when P3s will become more widely used in the United States.
Driving towards innovation
Proponents will tell you projects procured through P3s consistently outperform the traditional procurement approach when it comes to delivering assets on schedule and on budget — and it is true.
But, the long-term benefits of the evolving P3 model beyond on time and on budget are two-fold. If nothing else, P3s demand innovation. Innovation in a P3 project is often what drives real value for money.
But, it has become increasingly apparent that the value of a P3 facility is amplified when the life cycle of the asset is taken into consideration. It means maintenance costs, which are not considered in the traditional approach, are included in the fixed price of the P3 project. It means some of our most important publicly owned infrastructure doesn’t face demolition through neglect. It means our schools, hospitals, and highways are high-performance assets decades after the official opening and ribbon cutting because the private partners are incentivized to build facilities that last.
Innovation and life cycle — two important talking points in the P3 discussion. They will be highlighted throughout this campaign and figure prominently in the subject matter and sessions at the CCPPP’s 24th annual conference: Innovating Our Future. We would encourage readers to join the 1,200 P3 leaders and influencers in Toronto on November 14 and 15 for this timely brainstorming exercise.