November 26, 2008

National Conference on Public-Private Partnerships

Public-private partnerships not immune to economic downturn, expert panel says

VINCE VERSACE

staff writer

There is no doubt that the landscape of public-private partnerships will change as the ongoing economic slowdown unfolds, a panel of P3 experts agreed.

“It certainly affects us and we will have to adjust as we go along here,” said David Livingston, president and chief executive officer, Infrastructure Ontario.

Livingston was part of a five member panel at this week’s 16th annual National Conference on Public-Private Partnerships held in Toronto.

The panel discussed Canada’s current P3 health and expectations for 2009.

More than 19 projects with a contract value of $3.5 billion have come online just in 2008.

What happens next year is admittedly uncertain, said Greg Lusk, executive director, public works, Department of Transportation and Infrastructure Renewal for Nova Scotia.

“This (the economic slowdown) may lead us to more different packaging of projects,” he said.

“In the end, it comes down to looking at a project on its merits.”

Panelists said that 2009 does appear to be ready to deliver more roads, hospitals and public services via the P3 model.

However, a balancing act by all partners on a project will be required, added Larry Blain, CEO of Partnerships British Columbia.

“It is all about designing something that balances the risks and optimizes capital and not maximizes capital,” he explained.

Blain talked about the Fort St. John Hospital in B.C., which is waiting for its request for proposals (RFPs) to return by mid-December this year. How the risk will be managed by both private and public sides in this project will be interesting to see, since the two teams selected for the RFPs were chosen in July, before the economic downturn picked up steam.

Barry Day, deputy minister, Alberta Infrastructure, said the economic climate does impact the P3 market but he feels Alberta’s P3 situation is in a good position to endure its pressures

“In Alberta we feel lucky, we are not closing deals for another 12 to 15 months,” said Day. “We have flexibility in our projects to adjust things on the fly.”

Livingston noted that partnerships with a provincial government are important to keep in mind as the economy fluctuates. A provincial partner on a provincial project is a solid pillar to work with.

“The relationship with the province should be a factor in how people do things,” said Livingston.

Print | Email | Comment