January 25, 2010

Infrastructure procurement

Winnipeg seeing benefits of public-private partnerships

VINCE VERSACE

staff writer

Construction innovation and increased competition in the Winnipeg municipal project marketplace has resulted from that city’s use of public-private partnerships (P3s), city officials say.

“Instead of looking at private business as the enemy, government needs to make the private sector part of the solution,” Winnipeg Mayor Sam Katz said via video presentation at a recent national P3 conference.

Winnipeg decided to address local infrastructure needs and improve services over the last year by using P3 models for its Disraeli Bridges, Chief Peguis Trail and a wastewater services project. Addressing its municipal infrastructure deficit, just like other Canadian municipalities, required looking at alternative solutions to deliver projects and strengthen asset management practices, explained Preetipal Paul, Winnipeg’s capital project manager, at the conference.

“At a municipal level, we tend to build infrastructure as per our need, but there are not enough funds to maintain those assets for a longer period,” said Paul, also the project lead on the Disraeli Bridges and Chief Peguis Extension projects.

Winnipeg is aware that using P3s is not the sole project solution and the model should only be used in appropriate situations.

Paul said city project teams make sure to ask why and why not a P3 model should be used for specific projects.

The Disraeli Bridges project is considered a brownfield project by the city and their 1950s design and codes require updating to modern standards.

The bridge has a variety of traffic uses, from heavy transport to local business and downtown commuter traffic.

Paul said this P3 project’s 30-year term will deliver lifecycle benefits and the P3 model will help deliver construction innovation from the private sector, whether it is deck, bridge or girder replacements.

Effective design solutions and allocation of risk are key project factors.

“Whether public or private, the way we look at risk is that it should be assigned to the person who can manage it best,” he said.

The Chief Peguis Trail extension project is a four-lane divided highway that goes through a residential area and also involves upgrading current intersections.

Paul said the city will take over the maintenance part of this particular project.

Jason Ruby, financial lead on the Disraeli Bridges and Chief Peguis Extension projects, said the benefits of using a P3 model are clear since they resulted in increased competition on project bids.

“Our feeling was if we had pursued a more traditional design-bid-build process on some of these projects, we would not have had a lot of competition or just a sole bidder,” he said. “There are good companies (in the Winnipeg marketplace) but a sole-source situation is a sole-source situation.”

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