The following criteria will be considered when examining the various financing and procurement models available to deliver infrastructure initiatives. The government will assess the preferred financing and procurement approach for an infrastructure investment initiative based on the business-case analysis of these criteria.
Criteria | Considerations | Key Issues |
Financial | Which model delivers the initiative on the most cost-effective financial terms? | What financing tools/approaches (grants, fundraising, bond financing, pooled borrowing, private equity) are currently available to deliver the initiative? Are there sufficient revenue streams, commercialization opportunities or risks associated with project delivery or operating/maintenance that can support real risk transfer to a private-sector partner to make private financing desirable? This requires analysis from public- and private-sector perspectives. If the private sector can be engaged, is it possible to establish an equitable and effective payment mechanism that provides a reasonable return based on risks assumed, appropriate incentives and controls linked to clear service outcomes? |
Technical | What are the key technical issues impacting the initiative? Which model results in technical solutions that meet public service delivery needs? | Can clear and adequate technical specifications for the initiative be established? Does the initiative have technical constraints or risks that are more appropriately addressed by the private sector? If the private sector can be involved, can appropriate mechanisms/measures be established to monitor technical performance? |
Operational | What operational issues impact the choice of procurement model? | Must all the operation issues be addressed by the public sector, or can issues be managed by a private-sector partner? Can the government establish clear and measurable operating standards for the private partner? Can the private partner be held accountable for performing those standards? |
Public Policy | What public policy/legislative/regulatory constraints exist on the choice of model? | What is the legislative and/or regulatory framework governing the initiative? What constraints does this framework exercise over the initiative? Are there legislative/regulatory/policy constraints on the inclusion of the private sector? To what extent do various stakeholders such as public elected officials, service users, employees and government officials accept private-sector involvement? |
Implementation | What implementation issues/constraints affect the choice of model? | Is there a strong initiative champion with access to resources needed to make the initiative successful? How does the initiative affect the local community, service users and employees? Can a successful transition plan be developed and implemented to address issues that arise (i.e., labour adjustment, local affordability, etc.)? Is it possible to generate meaningful private-sector interest and competition in the initiative? Is there an impact on other government operations? |