The Alberta government is looking to harness public-private partnerships to finance an economic bounce back from the COVID-19 pandemic.
The Canadian Council for Public-Private Partnerships (CCPPP) recently held an Alberta Infrastructure Update webinar with Alberta Minister of Infrastructure Prasad Panda and deputy minister Shannon Flint. CCPPP president and CEO Mark Romoff acted as moderator.
Panda said the COVID-19 pandemic meant a re-evaluation of both methods of health care delivery and the way projects are financed by the provincial government and the private sector.
“We had to look at health care delivery differently after COVID-19 and it required some creativity and innovation in designing health care projects. We’re also looking at strategy going forward to also minimize the negative effects of other disasters such as floods and wildfires,” Panda said.
“Public-private partnerships will present a lot of ideas and we want to liberate private sector capital to find technological solutions, innovations and expertise by bringing in P3 contractors.”
Flint said the government is examining how to create and unsolicited proposal framework to gather new project ideas that help fund future infrastructure.
“We’re looking not just how we build infrastructure but how we get the infrastructure deficit down through different financing arrangements, including working with the Canada Infrastructure Bank in terms of some Alberta projects,” Flint said.
Panda said the unsolicited framework might lend itself to new health care projects beyond those already underway throughout Alberta.
“Through the unsolicited P3 submissions, we’ll get more ideas for health care projects in different parts of Alberta. We have a few already under construction but we want to increase health capacity in other parts of the province,” he said.
He added while the framework is still in its formative stages, he hopes to have it before cabinet shortly.
“We want to have it happen soon, but it might take a couple of months,” he said.
Flint added the unsolicited proposal framework will also “create some innovative approaches and projects moving forward,” and pointed to a recent Request for Qualifications for a P3 bundle of five new Alberta schools as another opportunity to push the envelope.
“Looking forward with the five schools, our goal is to harness the innovation and creativity of the private sector,” Flint said.
Panda said one of his primary concerns is that contractors are paid on schedule even during times of instability.
“Right now the government won’t have an indefinite amount of money to spend on projects and that’s why we’re actively looking at all sorts of P3s. Cash flow is really important for both government and contractors. So far, luckily, we’ve been able to fund all these projects and pay contractors on time,” Panda said.
“One of the main updates with my team every week is whether we are up to date with our payments to contractors or not because I take it very seriously to ensure cash flow is available for all contractors and stakeholders.”
He cited P3 projects as a key way to reduce costs on projects as governments spend their way out of the economic dip caused by the pandemic.
“We’re open to reducing expenses going forward by using private finance and we want to hear from stakeholders how they want to build to reduce costs. Outside of P3s for all our current projects we use secure funding but with all our new projects if our partners have ideas on how to finance them, we’ll definitely look at that,” he said.
“One of the things we’re always thinking about is how we bring costs, schedule and quality to projects and how P3 helps us do that. We’re looking at leveraging private financing and accelerating infrastructure provision and really harnessing the innovation that construction companies bring to projects,” Flint said.
Balancing risk allocation between the public and private sector is also important, she added.
“I think P3 certainly addresses that in a much more sustained manner. I think it really is a win-win for both governments and the private sector and releases budgetary constraints especially given the current fiscal environment,” Flint said.
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