FOCUS: ALBERTA INFRASTRUCTURE

Seeking stability in PPPs

The Province of Alberta pursues PPPs not just for their cost and efficiency savings but also to give some consistency to its capital planning needs

Danyluk: more bundled projects on the way

IF ONE WERE to pick a Canadian province that doesn't need to deliver its public infrastructure via PPPs, it would almost certainly be Alberta. Armed with a $17 billion reserve fund and an AAA credit rating, Ray Danyluk, the head of Alberta Infrastructure, the province's infrastructure delivery office, could certainly just have his team pick up the shovel and deliver the school, hospital or road with public money. But he chooses not to.

"We got into PPPs in order that we had some longevity to the lifecycle cost for our buildings," he says. A long-term maintenance contract under a PPP "gives some consistency to the people who are building it, gives cost and schedule certainty to the government and it really gives stability and predictability to our contractual agreements," he adds.

Stability may not seem like a big reason to pursue PPPs - people elsewhere trumpet their efficiencies and cost savings - but in Alberta it's an important hedging tool that helps the government plan its capital needs into the future. With nearly one-third of its GDP in 2008 coming from the oil and gas sector, Alberta's revenues are subject to wide fluctuation. That makes it hard to commit to a set level of infrastructure maintenance, design and construction well into the future.