Just as in the healthcare sector, the United Kingdom has invested billions in its public schools under the Private Finance Initiative. As of June 2003, there were 50 signed projects representing a capital value of £1.3 billion and covering nearly 600 schools. Twenty-three of those projects are operational and the government has allocated £1.6 billion for FY 2002/03 and 2003/04. Most contracts involve a 25-30 year agreement during which the private partner must ensure the assets are well maintained. They typically bundle the schools, representing a capital investment of between £50 million and £100 million supplied by the private sector, in return for a guaranteed payment over the length of the contract. Although the projects are being delivered on time and on budget, new approaches are being considered, including the standardization and centralization of regional projects to achieve greater cost efficiencies and faster approval.14
Canada has two major P3 initiatives in the school sector of note - one previous and one still in development. The Nova Scotia schools program has been one of the most hotly debated P3 initiatives in Canada. Much of the controversy centred on the Province's treatment of the operating leases as "off-book". However, this debate has both overshadowed the significant benefits that the P3 schools achieved as well as the importance of standardized and acceptable accounting treatment.15 The build-lease-operate-transfer contracts succeeded in: delivering 39 schools in record time, introducing a new way of designing and planning school infrastructure, and providing outsourced maintenance services at greater value.
The Calgary Board of Education is in the midst of a tender process for the design, building and possible financing of 29 new schools and refurbishment of existing capital. The total project is estimated to be in the range of $255 to $300 million, and may prove to be a valuable model for school projects in Ontario.
__________________________________________________________________________________
14 Public Private Finance, A Special Report on Education: "Focus: Incorporating the PFI Report", June 2003.
15 See "The Challenge" above.