...permit requirements...but these projects are relatively new in Alberta. The regulatory agencies aren’t used to dealing with design-builders. There’s no background, connections, relationships.” Adds Holte, “This project technically isn’t that glamorous. However, on these P3 jobs there are always a lot more players involved. We’re trying to satisfy the operators and maintainers, and the ultimate owner, Alberta Transportation. There are lots of meetings all the time. With utility owners, even that takes hundreds of meetings...we have to go out and get all the approvals.”

In at least one case, adversity led to innovation. The team developed a new method for multiple stakeholders to review and approve drainage plans, condensing into a few months a process that typically would have taken several years. “Nobody expected the approval process to be so tough,” recalls Jason Rudyk, assistant project manager. “What we did was pull everybody into a room and convince the regulatory agencies that...the overall system had to be looked at as one pond. We brought in independent experts to review the analysis and each owner’s representative to look at specific portions of the drainage.” The province has officially lauded the team for the revamped process.

Communications was another contractual requirement, adds Dale Gamble, the team’s construction manager. “We had open houses, media events,” he says. Although the corridor for the ring road had been designated since 1976, residential construction since then means that, “for about half the road, we’re up against the backyards of citizens,” he notes.

Bancarz says one lesson the province learned from its first P3 job, the southeast leg of the Edmonton Ring Road, was, “if we put a little bit of our own money up-front, it makes the project more attractive to the private sector, so we get more and better bids.” On the first job, no provincial funds were involved. On Stoney Trail, the government provides a $300-million down payment. “You have to consider how much can you budget for it...find the middle ground between ‘not attractive to’ and ‘too generous’ to the private partner.”

Another lesson learned was a “good mistake” that the auditor general of Alberta helped to remedy. “When we get bids for P3s, we go through a process to determine what this would cost us if done conventionally,” says Bancarz. “P3 bids have to come within the range of the ‘public-sector comparator.’ We lowballed our own estimate, so the cost savings didn’t look that great. What the auditor general told us is that our public sector comparator bid should’ve been higher. He pointed out a couple of flaws in our process. It was very instructive.”

McQuay cites increased upfront collaboration with bidders. “After our first P3, we went and expanded our model to include proponent meetings regarding engineering, design and maintenance. It opened up a lot more discussion that worked well for the [bidders]. The main goal is to get it to the point where we have a template for what works.”

Even so, provincial officials were shocked at the bids for Stoney Trail. “The three bids we got, two were surprisingly low,” Bancarz recalls. “One was close to the public sector comparator. Stoney Trail’s bid—we couldn’t believe how low it was. We got a little worried. Was this too good to be true? We went through it with a fine-tooth comb.” Instead of the approximately $1-billion estimate, Bilfinger Berger’s team bid $630 million.

But province officials are breathing easier as the project nears completion. Despite bad weather, silty clays, labor shortages and an Alberta construction season that runs from approximately May to November, the team expects to finish its last major milestone of asphalt paving a month ahead of its Oct. 24 deadline and avoid potential liquidated damages of $50,000 a day overall.

The team not only bears the risks of inflation and weather-related delays but must fulfill a 30-year warranty. The government made a $300-million down payment and will commence annual payments of $21 million for 30 years once the road opens. “This is a totally different mind-set,” says Gamble. “It’s not based solely on the money. For whomever gets the work, it’s a process, and performance is a big part of the evaluation. At the end of the day we have to be confident of what we’re doing. Then we can step back and say we did the job we said we would.” Adds Holte, “For all the firms involved in the joint venture, we want to do it again, and the only way to do it is by reputation.”

As for the government, it estimates that building the road conventionally would cost it up to $1.39 billion over 30 years, instead of $930 million—as well as two more years of construction time. “People tend to get fixated on the money and ask ‘why go through this? It’s only a few million dollars difference,’” says Bancarz. But from the general public’s perspective, “They just want a road to drive on. That’s what they care about. If you can give it to them two years sooner, all the better.” And if the concessionaire doesn’t maintain and operate the road adequately, Bancarz says, “We can withhold payment.”

Bilfinger Berger and the Flatiron-led team are doing it again, in a joint venture called Northwest Connect, on the $1.42-billion Northwest Anthony Henday Drive in Edmonton. The construction phase is scheduled for completion in fall 2011, and involves 21 km of up to six lanes of freeway, 29 bridges, eight interchanges and two rail crossings. The contract was signed in July 2008. “We were on site with earthmoving equipment the second week of August,” says Mark Basher, deputy project manager for that team. This time, weather has cooperated, and Northwest Connect is nearly finished with 13 million cu m of earthwork, along with eight bridges, as the construction season winds down for the year. “Merit goes to the owner for spending time working through the functional plan with stakeholders prior to presenting the request for qualifications to the industry,” Basher says. “They prepared a bid package that represents their stakeholders’ interests. So we can take that and finalize our designs in accordance.” The team did a redesign of two major interchanges, which decreased overall costs by more than $10 million.

There’s still some challenges in dealing with other agencies. “Design-build is still relatively new to the industry, and not fully appreciated by all the regulatory agencies out there,” he says. “We work hard with them to try and bring our...