Broader mandate, bigger ambition
Armed with a $42bn infrastructure commitment from the government and a new mandate to help deliver all big projects regardless of their PPP viability, Infrastructure Québec's Normand Bergeron expects a robust pipeline of projects to keep developers busy in the coming years
NESTLED IN BETWEEN Ontario and British Columbia population-wise, Québec, is perhaps an uncomfortable fourth in terms of closed PPP projects that it's delivered. But Normand Bergeron, the chief executive of Infrastructure Québec, the province's infrastructure procurement body, has plans to catch-up.
It begins with a firm commitment from the government. In 2008, Québec agreed to spend $42 billion upgrading its infrastructure over five years - money which Bergeron believes will finally lead to pipeline of viable PPP candidates.
"We expect 25 projects by year," he says. Those will be all the projects that will cross the $40 million threshold at which Infrastructure Québec is tasked with determining the best mode of delivery. Of the 25 candidates each year, about one out of every four will be delivered as PPPs, according to an estimation done by Infrastructure Québec.
"We expect between five and ten projects to be delivered by PPP," Bergeron says.
Another element giving him optimism is Infrastructure Québec's new mandate. When it was originally created in 2005, Infrastructure Québec's sole focus, as suggested by its previous name, PPP Québec, was PPP delivery. If a project wasn't going to be delivered as a PPP, it wasn't going to get involved. The approach resulted in only seven closed PPP projects.
And even getting to seven wasn't easy. Critics such as labour unions charged that, as a PPP-only organisation, Infrastructure Québec was predisposed to support PPP procurement. After all, without PPP projects, it would have nothing to do.
So in december 2009, Québec's National Assembly passed a bill which broadened Infrastructure Québec's mandate beyond PPPs. The bill conferred on Infrastructure Québec all the powers of its PPP predecessor, plus the responsibility to work with public agencies to prepare a business case for all their projects over $40 million, regardless of delivery mode.
"When you give us a broad mandate, we are more objective than when you suggest 'PPP'," Bergeron says of his new responsibilities. "We are asked to choose the best mode of realisation for each project," he asks.
The assessment begins when one of the provincial ministries comes to Infrastructure Québec with an idea for a project. Infrastructure Québec will analyse the project and come to a conclusion about how much it will cost and whether it should proceed as a PPP or through a traditional delivery method, such as a design-build contract. It will then present its findings to a nine-member board, which is composed of five public sector representatives, three private-sector representatives and Bergeron himself. If the board approves the project to go forward as a PPP, Infrastructure Québec then begins a procurement for a private partner.
Bergeron cautions that size is not an "automatic" indicator of PPP delivery. For example, in July, the premier of Québec announced a new children's' hospital for Québec City. After analysing the $564.3 million Sainte-Justine University Health Center, Infrastructure Québec decided it would be best procured under a design, build, finance contract, not as a full PPP.