EllisDon up for 10 Americas P3 awards

The Americas P3 Awards will be handed out in New York City Oct. 3 with the event looking to be a coronation for the Canadian P3 model.

Canadian projects and firms dominated the nominations list released earlier this year. EllisDon alone is up for 10 awards with three nominations each in two social infrastructure categories.

Its financial division, EllisDon Capital, has been nominated for Financial Advisor of the Year and Sponsor-Developer of the Year and the capital division finds three of its projects — the New Toronto Courthouse, the Royal Inland Hospital Patient Care Tower Project in Kamloops, B.C. and the West Park Healthcare Centre Hospital Development Project, also in Toronto — up for awards in the Best Financial Structure, Social Infrastructure category.

“It has been great. The P3 model in Canada is now seen as the global leader,” commented Joey Comeau, chief operating officer and executive vice-president of EllisDon Capital.

“It is exported quite heavily in the U.S., they are trying to adopt legislation to look at P3s for their projects and it’s doing well in South America.”

The P3 Awards are run by Partnerships Events, which organizes a series of annual events focusing on public-private partnerships. While the general public tends to focus on the builds themselves, the P3 industry understands that financing is an important component of the sector, Comeau indicated — thus the significant attention paid to debt providers and financial structures and advisors in the P3 awards categories.

“Because it’s such a complicated area, it is nuanced and a niche area, it is difficult for the general public to wrap their heads around it,” Comeau said.

The P3 judges in the financial categories will evaluate the EllisDon projects based on how “tight” of a financial structure EllisDon Capital is able to put together leading to the best value for money, he said.

Comeau laid out some of the steps EllisDon Capital takes in a typical P3 procurement.

While its partners in a P3 consortium are busy designing and project planning during the RFP stage of a typical DBFM project, EllisDon Capital is following a tightly scripted timeline.

Early on it is lining up potential counterparties and assessing project details with its teammates, then running competitions with a handful of banks and developing dozens of financing scenarios for various stages of the project.

Comeau and colleagues also work with the project owner to integrate the owner’s financial commitments, discussing risk transfer and incorporating analysis of long-term bond rates and the specific risk-adjusted financing costs associated with the project to come up with an acceptable financial structure.

Over the course of the procurement, EllisDon Capital will have looked at perhaps 200 different financial structures, Comeau said.

“In each category of the project you have to ensure you are as competitive as possible. What we are ultimately trying to drive is the lowest financial cost for the project,” he said.

Even a project such as the $950-million New Toronto Courthouse, a DBFM project for Infrastructure Ontario and Ministry of the Attorney General which does not have significant construction risk, Comeau said, represented an intriguing challenge for his team.

“This is one of the most exciting projects that we have had due to the nature for the project, it’s high profile in the city of Toronto, so the innovative aspect of this one was how overall tight we were able to make it,” he said of the financial structure.

EllisDon Capital ran a highly competitive funding competition for the courthouse project, Comeau said, and is using an innovative structure they have used a few times in the past, a delay draw, with the consortium drawing money during construction as it is required.

“What we are doing, we are drawing our long-term and our short-term facility at the same time, only as we need it during the construction period,” he said.

EllisDon was successful on the first two P3 projects in Ontario, the William Osler Hospital and the Royal Ottawa Hospital, executed before the founding of Infrastructure Ontario in 2005. EllisDon founded its capital division at that time.