Chapter Summary ◆ Most Canadian jurisdictions active in P3 procurements have an explicit framework in place for assessing procurement options for public infrastructure. ◆ The VfM test is the main tool used by all Canadian jurisdictions active in P3s to assess whether procurements are suitable for the P3 approach. ◆ Some observers question whether the VfM test is a genuine test or whether it can be arbitrarily managed to generate desired results. ◆ Procurement authorities should consider comparing the P3 procurement option with the next best available procurement option (which is not always the typical "design-bid-build" approach of conventional contracts), developing a pan-Canadian evidence base of conventional infrastructure projects covering key outcomes, and updating VfM studies after completion of major milestones. ◆ The procurement processes for the second wave of P3 projects have been far more transparent than the procurement processes for conventional public infrastructure projects. |
In this chapter we examine three questions about the integrity of P3 procurement processes for the second wave of Canadian P3s:
◆ How do governments choose projects suitable for P3 procurement?
◆ Are VfM tests based on a rigorous methodology?
◆ How transparent are P3 procurement processes compared with conventional procurements?
It is widely recognized that P3 procurements are not appropriate for all infrastructure projects. For example, in many of the jurisdictions with active P3 procurement programs, these types of procurements account for 20 per cent or less of total capital spending on public infrastructure.1 Thus our first two questions deal with the issue of whether a rigorous process is in place to select the right infrastructure projects for P3 procurements. The last question addresses the practices in place to ensure transparency of P3 procurement processes vis-à-vis those for conventional contracts.
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1 According to Grimsey and Lewis, P3s account for between 10 per cent and 14 per cent of public sector investment in the United Kingdom and about 10 per cent of public sector capital investment in the State of Victoria, Australia's largest market for P3s. See Grimsey and Lewis, "Public Private Partnerships," p. 76. We are not aware of data showing the importance of P3s relative to total capital spending by governments across Canadian jurisdictions. One of the leading participants in the P3 market in Canada noted that he "couldn't imagine more than 10 or 20 percent of all the capital projects that the [B.C.] government does being done in a P3 way." See Blain, Partnerships BC. This is also consistent with a statement by the Chair of the Conseil du Trésor of Quebec, Monique Gagnon-Tremblay, who noted that only about 10 per cent of the province's infrastructure spending is for P3 projects, as mentioned in Chapter 1. See Dougherty, "Quebec Renames Agency."