The Canadian Council for Public-Private Partnerships applauds the Government of Ontario's recognition that there is a serious infrastructure deficit facing the Province and that new approaches are needed to meet the challenges. The Council is Canada's national voice on public-private partnerships, with membership from the public and private sector in almost equal numbers. The Council disseminates information on P3s that are used by decision-makers across Canada at all levels of government and business. We believe that P3s bring together certain intrinsic features of each sector to maximize the quality of services and leverage the value of assets provided to the public.
This paper provides an overview of successful approaches to infrastructure financing, development and operation, primarily through public-private partnerships. These practices represent a compendium of research conducted by The Council over the past five years, supplemented by studies from other respected organizations in Canada and other countries. Apart from this paper and representation at the stakeholder meetings, The Council would be pleased to provide any further expertise to the Government of Ontario as it designs and rolls out its infrastructure plan.
Below are some highlights from this paper - a synopsis of what makes P3s such a compelling and effective infrastructure development model for governments around the globe.
1) Output-based contract specifications provide a much more effective public interest protection than prescriptive, input-based contracts.
2) An enhanced and independent regulatory environment ensures that P3s achieve their maximum benefit and oversight remains relevant.
3) Accurate Public Sector Comparators using an independent consultant and consistent accounting principles facilitate value for money comparisons.
4) Appropriate measurement and allocation of risks are integral to assessing the true value of P3s.
5) Penalty and incentive mechanisms leverage the advantages of the profit motive already inherent in P3 projects.
6) The structure of public control and ownership should be assessed on a project-by-project basis, but the design-build-operate-model has proven to be one of the most efficient models adopted worldwide for infrastructure development.
7) A positive working relationship, frequently associated with veteran P3 partners, can often provide greater value than "command and control" governance.
8) Fairness, transparency and efficiency can best be achieved through proactive communications, balancing freedom of information with proprietary know-how, establishing a solid business case and minimizing protracted RFP processes.
9) P3s lend themselves to long-term strategic planning and life cycle costing. Considering P3 as a proven process rather than a political doctrine can further enhance multi-year planning.
10) The UK has demonstrated the benefit of standardized contracts and comprehensive guidance to delivering efficient infrastructure development. A focused P3 department with clear authority and proven skills (e.g. City of Ottawa) contributes to the speed of delivery and market response.
11) Dedicated infrastructure funds and the implementation of user fees are effective tools to leverage investment and attract private capital.
12) Proactive communications and more flexible legislation will help remove many of the barriers to P3s, especially at the municipal level.