Canadians Commit To Concessionaire Contracts for Infrastructure and Buildings
In just a decade, the “big four” Canadian provinces of Alberta, British Columbia, Ontario and Quebec have embraced public-private partnership (P3) projects to the point where they are almost a mainstream construction-delivery method. While concessionaires continue to keep an eye on the uneven progress of the U.S. P3 market, they have gone north to land solid P3 projects.
“In Canada, there is a big pipeline of opportunity,” says Steve Small, senior vice president of development in Bilfinger Berger Project Investments Inc.’s Vancouver, British Columbia, office. “We are actively bidding on five projects and looking at another five. In the United States, a lot of projects have come out, but only a few have actually closed. There have been a lot of start-stops. There is huge potential [for U.S. P3 projects], and we’re watching closely until we get some comfort that the processes are inplace and the political will is there.”
Bilfinger Berger is the concessionaire on two 30-year P3 highway projects currently under construction in Alberta. One is for the $630-million, 21-kilometer northeast section of the new Stoney Trail ring road in Calgary, to be completed this fall; the other is a $1.4-billion, 21-km northwest ring road in Edmonton, to be completed 2011. Both projects are being built by a design-build team of Flatiron Construction Corp., Longmont, Colo., Graham Group Ltd., Calgary, and Parsons Corp., Pasadena, Calif. They are the second and third P3 highway projects the province has tackled since 2003.
Neill McQuay, now an assistant deputy minister for strategic capital planning on Alberta’s treasury board, was one of the chief architects of Alberta’s P3 model. “The big thrust here is that you can’t do a P3 unless you have political support,” he says. “The minister, now our premier, gave us the support we needed.” One of the biggest lessons learned from other P3s is up-front negotiation, he adds. “Prior to price submittals, we develop an agreement: Whoever wins will sign,” he says of working with the competing concessionaires. “There are no [price] negotiations after the award. It’s an open and transparent bidding process.”
“We’re getting more experienced as time goes on and as we do more of them,” says Trent Bancarz, spokesman for the Alberta Ministry of Transportation. “We did the first one in 2005. We did a lot of due diligence. We studied different P3s from all around the world, not just highways but buildings, bridges, transit—you name it. We took all the best elements and put them into our model.”
Calgary Cruise
The concessionaire and design-build team seem to agree. “Alberta is being the ultimate owner—it is miles ahead of some owners in the U.S. in terms of innovative project delivery,” says Lorie Holte, project manager for the Flatiron-Graham-Parsons team, called Stoney Trail Group. It has a 30-year concession to design, build, operate and partially finance and maintain the Northeast Stoney Trail road. The design-build team is a month ahead of its scheduled Nov. 1 completion after less than three years of construction.
One (literally) concrete example of success is the production of 225 precast girders. “There are three or four precasters in the province,” notes Holte. “This contractor shows up and says, ‘We’ll do it ourselves.’ It blew [provincial officials’] minds, but they embraced it.”
Still, as only the second P3 road project in Alberta, experience is gained on the job. “It’s a learning process for everybody,” says Holte. “More so for the owner. At first they were leery, asking a lot of questions. We did a lot of hoop jumping. But overall, it’s gone well.”
Other regulatory agencies had a learning curve as well. “I was working on the Third Tacoma Narrows Bridge design-build job,” says Eric Ostfeld, the team’s design manager. “The owner there was a lot more involved in helping with...
