Monday, March 23, 2009

Global News Coverage of P3s

I came across this clip through someone on Twitter. Seems Arnie likes BC's approach to P3s.

The report does highlight some important things to know about the P3s that have happened in BC. Specifically the Kicking Horse Bridge was on budget and done 19 months early, the Bennett Bridge in Kelowna was on budget and three and half months early, the Sea to Sky Highway remains on budget and looks to be completed two months early, and the Canada line looks to be two to three months early and on budget.

These results alone point to the type of benefits one looks for in P3s. You want cost containment and delivery on time. There is an ongoing problem globally with large scale capital infrastructure - they tend to be over budget and late. I point again to the work being done by Bent Flyvbjerg in Denmark on this issues. There has been a long term systemic problem with cost and time issues for large capital projects, a P3 is one of the potential tools that can be used to mitigate the systemic problems.

Do we know how much it cost for the company to build the Kicking Horse bridge? No, but we do know what they are being paid. The company may or may not have made money on the project, but that is not our problem.

P3s are also great signals to government as to realistic costs to build something. If government seeks a P3 on a project and no one bids on it, then this is a strong signal saying there is something fundamentally wrong with the project assumptions. The new Vancouver Trade and Convention Centre has borne this out.

It concerns me that the government is not going to build the new Port Mann as a P3. The loss of the private sector sends a strong signal that there are problems with the project.
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