Bechtel-led team kicks off construction on $1.8B Canadian P3 light rail

Dive Brief:

Bechtel-led consortium TransEd Partners announced it has started construction on the 8-mile, $1.8 billion Edmonton Valley Line Light Rail Transit – Stage 1 project in Alberta, Canada.
The rail project is the first private-public partnership (P3) in Edmonton and the first undertaking for Bechtel’s new P3-dedicated business group. TransEd Partners also includes Bombardier, Ellis-Don and Fengate Capital Management.
The P3, according to Bechtel, is involved with the financing, design, construction and maintenance of the rail line on behalf of the city. When complete, the rail will feature 11 stops and an elevated transfer station with a park-and-ride component.

Dive Insight:

Not only is this the first P3 for Edmonton, but it is also the city’s largest infrastructure project to date. According to earlier reports, TransEd Partners will carry the risk of staying on budget and performing according to the city schedule or face harsh penalties.

Canada has already successfully used the P3 structure for other infrastructure projects. Ontario Minister of Transportation Stephen Del Duca credited the P3 framework for $2 billion in savings on its 12-mile, $9.1 billion Eglinton Crosstown light rail project. Del Duca also said that P3s shield taxpayers from the aftermath of a project gone wrong.

According to industry experts, the private component of a P3 offers access to financial resources and innovation that municipalities and local governments will increasingly need in order to complete necessary infrastructure projects. Larry Casey of Skanska USA told Construction Dive last month that the cost to maintain the existing infrastructure in the U.S. will reach approximately $3.6 trillion by 2020 and that P3s are a "terrific" way for the public sector to approach their laundry lists of pending projects.

And in a USA Today editorial last year, Brendan Bechtel, president of the Bechtel Group, urged Congress to up its investment in what he called this country’s "crumbling, unsafe, environmentally unfriendly, productivity-choking” aging infrastructure. In the piece, Bechtel extolled the many benefits of P3s and suggested they could go a long way in solving the nation's bridge and highway funding obstacles.