Business Model
• The Successful Proponent is responsible for the Project over the term of the Agreement. In return, the Successful Proponent receives pre-defined payments over the term of the Agreement.
• Payments are from the department.
• The Province of Alberta does not guarantee any debt.
• The structure of the contracting entity is established by the Successful Proponent to offer best value to the department.
Timing
• Identify when the capital work is to be complete and open for use.
• Identify the duration of the operating period.
• Identify how early or late completion of the capital work will be dealt with.
Payments
• Payments by the department to the Successful Proponent may consist of;
o Progress payments to offset some of the capital borrowing requirements.
o Capital payments for the remaining capital costs during the operating period.
o Operating payments during the operating period
o Maintenance payments during the operating period.
o Service payments during the operating period.
o Third party revenues
o Performance-based payment adjustments and holdbacks (on progress payments and handback deficiencies) to amounts otherwise payable.
o Special adjustments during the operating period for predefined events.
Ownership
• The Province of Alberta retains freehold interest in the land required for the facility and enters into a nominal amount ground lease.
• The Successful Proponent owns all infrastructure improvements it constructs.
• On expiry of the Project Agreement all interest in the infrastructure improvements reverts to the Province free and clear.
Tax
• Each Proponent needs to satisfy itself of the tax consequences of the Project Agreement.
Insurance
• Certain mandatory insurances are required as detailed in the Project Agreement.
• Insurances must comply with Alberta legislation.
• The Successful Proponent can obtain additional insurance.