Dive Brief:
- Infrastructure Ontario and the Centre for Addiction and Mental Health have awarded a $685 million public-private partnership contract to design, build, maintain and finance a new Toronto healthcare facility to a Plenary Group-led construction and operations consortium, according to Healthcare Design.
- The project will include the construction of two buildings encompassing 655,000 square feet and will feature 235 beds; outpatient, research and educational facilities; a relocated emergency services department; and site upgrades of parks and green space.
- The Plenary Health CAMH consortium also includes PCL Constructors and Stantec Architecture. Construction is scheduled to start later this year, with estimated completion set for spring of 2020.
Dive Insight:
P3s, which are joint agreements between a public agency and a group of private companies, are being increasingly utilized for infrastructure projects in the U.S. However, the delivery method has seen wider implementation in Canada, which has become a de facto proving ground for the its ability to skirt red tape and deliver complex projects more efficiently. Using this method, the private side of the partnership typically not only designs, builds and operates the structures but also finances them, leaving public agencies more dollars to utilize on additional projects.
Canada captured the infrastructure sector's attention in late 2015 when Ontario’s Minister of Transportation announced that it had saved $2 billion on a Toronto light-rail project by using a P3. And when Brendan Bechtel, CEO of construction giant Bechtel, wrote an op-ed piece in USA Today imploring American public officials to take action and dedicate more resources to overhaul the country's infrastructure, he cited Canada as an example of how to achieve that goal efficiently.
Bechtel later announced that it had formed a P3-specific business unit, with its first project being an 8-mile, $1.8 billion light-rail system in Alberta, Canada. The Bechtel-led TransEd Partners, like other P3 groups, took on the budgetary and other project responsibilities at the risk of severe financial penalties.
P3s are also likely to play a role in President Donald Trump's $1 trillion infrastructure plan. His team has presented a proposal that would encourage private investment in exchange for an 82% tax credit. "When Trump says at his victory speech he wants to put $1 trillion into infrastructure and mentions public-private partnerships, that gets everybody excited," William Eliopoulos, head of the construction industry practice at Rutan & Tucker, told Construction Dive earlier this year. However, construction groups are still waiting for the president to offer additional details about his proposed spending program.
