D.  ANCILLARY COSTS

Figure #5

There are significant costs associated with the planning and delivery of a large complex project that could vary depending on the project delivery method. For example, there are costs related to each of the following:

•  Project management: internal and/or external project management fees, whether direct or indirect, including the incremental costs of Infrastructure Ontario providing its services under alternative financing and procurement.

•  Transaction costs: additional transaction costs are typically incurred under alternative procurement and financing, including legal, capital markets, fairness, transaction, architectural and engineering advisory fees.

Ancillary costs are quantified and added to each model as applicable. Project management and transaction costs are likely to be higher under AFP given the greater degree of up-front due diligence. As illustrated in figure #5, ancillary costs are higher, at $14 million, under ASB while they are $12 million in the PSC.