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Build, finance, capitulate
23 October 2010
Ontario and British Columbia should now be in a position to justify the benefits of long-term PPPs. But both are turning back towards simpler construction financings. Edward Russell reports.
How quickly times change. Not four months ago, Canadian politicians sang the praises of public-private partnerships, or PPPs, and Canada’s provinces were top target markets for sponsors and lenders. Ontario had the most robust pipeline of design-build-finance-maintain (DBFM) concessions in procurement, with British Columbia close behind. But as quickly as they could endorse the model, politicians could scupper it.
According to various sources at Infrastructure Ontario (IO), the province’s PPP procurement agency, Ontario’s upcoming 10-year infrastructure plan will likely contain a significant number of build-finance (BF) or design-build-finance (DBF) deals, and a smaller proportion of the DBFM concessions that attract foreign sponsors and financial equity providers. These sources attribute the shift to concerns from provincial legislators over the cost-effectiveness and multi-year payment obligations associated with long-term concessions – a budgetary concern high on their list ahead of the 6 October 2011 provincial elections. The plan is due to be released...
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