The VfM test is the main evaluation tool used by all Canadian jurisdictions active in P3 project delivery to ensure that the appropriate infrastructure projects are chosen as P3s. These are the projects where there is value for money from executing a project as a P3 rather than a conventional project. First, we examine what kind of framework policies are being used to assess procurement options in general and P3s in particular. Second, we examine whether any specific guidelines exist to help public sector bodies determine whether a P3 is an appropriate delivery mechanism without having to conduct a full VfM analysis of the two procurement scenarios.
Most of the jurisdictions active in P3 procurements have an explicit framework in place for assessing procurement options for public infrastructure. The first and most elaborate of these is British Columbia's Capital Asset Management Framework (CAMF), which was issued in May 2002, at the same time as Partnerships BC was set up to facilitate implementing P3s at arm's length from the provincial government.2 It prescribes in the first instance an analysis of whether there is a true need for the capital spending or whether that need can be met through better management or more efficient use of existing assets. If the need for a specific capital outlay is established, it prescribes a "strategic options analysis" of a full range of options for meeting the identified service need, including:
◆ alternative service delivery options;
◆ P3s;
◆ asset disposal or leveraging; and
◆ traditional procurement.
Capital procurement frameworks introduced by other jurisdictions active in P3s include Alberta's Capital Plan, which includes a role for P3s-a procurement option that is first evaluated by the provincial ministry responsible for the project.3 The Plan also calls for an external, private sector Advisory Committee on Alternative Capital Financing, which provides advice on the projects referred by the Alberta Treasury Board Committee. The Government of Quebec introduced the Public Private Partnerships Framework Policy in 2004. This policy institutes a 10-step business case analysis to identify whether a P3 is an appropriate procurement tool for meeting an identified capital need.4 It is worth noting that the policy does not interpret private financing as one of the essential requirements for P3s. Moreover, the Quebec government has recently instituted a business case analysis as a requirement for any other type of major capital procurement, including conventional procurements. In Ontario, the infrastructure planning, financing, and procurement framework is presented in Building a Better Tomorrow.5
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2 Government of British Columbia, Capital Asset Management Framework.
3 Government of Alberta, Building Tomorrow.
4 See Government of Quebec, Public-Private Partnerships Framework Policy, p. 12. See also Gouvernement du Québec, Politique-cadre sur la gouvernance.
5 See Government of Ontario, Building a Better Tomorrow.