The Wildrose Party is calling on the Alberta government to rethink the P3 funding option, after a report surrounding the system to fund 19 new school projects throughout the Province and four in Airdrie, have only received one bid from contractors as “the projects are too big” in scale.
The Deloitte report, produced internally for Alberta Infrastructure, found that the 19 schools put out for procurement on a Design-Build-Finance-Maintain P3 model are not getting contractor interest because the project is too big.
The P3 system aims to share the cost of the infrastructure costs with the private sector to secure a lower interest loan than the Province could.
Critics disagree, saying debt sharing is not an effective way to finance infrastructure projects.
Wildrose Education Critic Bruce McAllister said the PCs’ P3 contracts are resulting in over-crowding in Alberta schools.
“Albertans need schools now, built on time and on cost,” McAllister said.
“To do that, we need to restructure these P3 projects so that small and medium-sized builders can get involved. The PCs are getting really good at making announcements and putting up signs, but they’re not getting shovels in the ground.”
On Aug. 22, 2013, Alberta Infrastructure issued a Request for Qualifications for the Design-Build-Finance-Maintain of 19 schools located in Southern and North Central Alberta.
The procurement process was to culminate in awarding the successful proponent responsibility to design, construct and finance the project and to maintain it for a term of 30 years.
“What we found is that there were lots of companies and organizations … lots of organizations that looked at it, and at the end of the day there was only one consortium that put their resume forward,” explained Parker Hogan, press secretary for the Minister of Infrastructure.
“They met or exceeded that criteria, so we move into the second phase, and that’s when they are going to cost it out – how much and when they are going to deliver it.”
The project, according to the report, “was to be based in large measure upon the successful processes and project agreements for past Alberta P3 projects, including the bundled schools… and the response rate was lower than expected - only one response was received.”
“The report came back and said that the Province is very busy and there weren’t a lot of organizations that came forward that had the workforce to build the school in the time frame,” Hogan said.
“The second thing was about risk and reward… In a extended geographic region 19 (schools) were too many and too far apart and we can use that moving forward ... maybe we need to look at smaller batches or maybe they need to have geographic proximate price to make them worthwhile for a construction company.”
Wildrose Infrastructure Critic Drew Barnes said Wildrose has been advocating in favour of manageable and competitive design-bid-build and design-build contracts over non-competitive, P3 build contracts for months.
“This report makes recommendations matching exactly what the Wildrose Official Opposition has proposed and it actually comes from inside the government,” Barnes said.
“The PCs need to quit playing politics with infrastructure and listen to what the experts are saying. Their stubbornness is costing Albertans. ”
In 2013, the Wildrose published an infrastructure report called A Better Way to Build Alberta, where the party stressed the significance of … the traditional Design-Bid-Build and more Design-Build methods of infrastructure procurement in cases like this, and to end the debt-financing of P3s.
“No where in the report does it say P3’s are bad or shouldn’t we shouldn’t be doing it. That’s the fallacy that the Opposition continue to push,” Hogan said.
A decision on the second phase, determining the cost of the project, will be announced in the coming month, according to Hogan.
