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The Growing Acceptance of P3s in Canada

By Robert Boraks, Director, Parkin Architects Limited

Canada has developed robust experience in Public-Private Partnerships (P3s) over the last two decades. The steady expansion of this ever-expanding market has established our country as a global leader in the provision of this type of delivery system.

So, what is driving Canada’s P3 success?

The Canadian Council for Public- Private Partnerships, (CCPPP), recently stated that public-private partnerships foster innovative approaches to building modern public infrastructure and services. P3s enable Canadians to benefit from state-of-the-art solutions to complex public needs.  The integration of facility design, construction, finance, and maintenance under the long-term responsibility of a private sector partner encourages creative design solutions with long-term performance in mind.”

P3 Innovation

I recently participated on a panel at the CCPPP’s 2014 Second Annual National Conference.  Other panelists were industry leaders from PCL Construction, Graham Construction  and MMM Group Limited.  Based on our experiences, we were asked to debate whether the P3 process has fulfilled expectations with regard to design and construction innovation in a process as rigid, compliant and legally restrictive as a public-private procurement process.  There was agreement among the panellists that the degree to which pursuit teams are prepared to explore new ideas is directly related to the terms of the Request for Proposal (RFP), and the degree to which teams are required to follow exemplar designs.

It was pointed out that, from a building design perspective, a distinction must be made between good design and design innovation.  Good design is an expectation.  Innovation is the ability to consider paradigm shifts and explore “brave new worlds”.  Due to the fact that P3 pursuits have historically emphasized risk mitigation and fiscal frugality, there are few P3 examples that can truly be called “innovative.”

According to the CCPPP, “Studies comparing P3s and conventional projects demonstrate that they have delivered an average of 13 percent in cost savings and have a very strong track record of on-time, on-budget delivery”.  The panel agreed that “value for money” has been a primary element of the P3 process which, while important, has resulted in a process that places a premium on the ability to quantify savings, sometimes at the expense of innovation.  The panel urged selection committees to not feel exposed to legal action if they award projects based on elements that are difficult to quantify.  A greater emphasis can be placed on qualitative innovation that responds to performance criteria.  At times, qualitative innovation may result in higher capital and operating costs. However, if a hospital design helps to reduce death, or if a prison design helps to reduce recidivism, then the value for money savings is incalculable.

Innovation Opportunities Across Sectors 

The panel was asked to comment whether all building types lend themselves to innovation.  While it is more difficult to introduce design innovation into buildings that contain complex relationships among departments – such as hospitals and courthouses – it is possible.  A number of P3 projects have garnered international design awards, including the Southwest Centre for Forensic Mental Health Care in St. Thomas, Ontario.

The most difficult building types into which to introduce innovation are correctional facilities, due to strict security and protocol measures – and strong collective bargaining agreements.  It was noted that a Build Finance model may be a more appropriate procurement method for these facilities.

P3s and Sustainable Design 

RFPs typically speak to the importance of environmental sustainability, and meeting LEED accreditation. The panel noted that, in view of the environmental crisis overwhelming the planet, the P3 process in Canada has not gone far enough to encourage leading-edge sustainable thinking.  It was pointed out that the conference attendees represent the highest levels of design, finance, construction and government procurement. It is this same group that should be setting the bar high for environmental innovation.

When asked how those attendees could do more to promote sustainable thinking, CCPPP advises, “Educate.  Talk to your neighbours, business leaders, public sector employees, and your local politicians.  If we want leading-edge, sustainable designs in our public infrastructure, we need to highlight the success stories and show the benefits that these designs have provided for both the environment and the long-term performance of the infrastructure asset”.

In summation, the panel agreed that less restrictive, performance-based procurement processes will lead to greater innovation and value for money.  Ideally, the RFP would introduce incentives to encourage teams to innovate.  The panel noted that the P3 process in Canada has matured to the point where procurement agencies have started to incentivise innovation.

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