A dramatic shift in public policy i...

A dramatic shift in public policy is taking place in BC as a proceed of the provincial government having embraced public-private partnerships (P3s) While public-private partnerships are not recently made known to BC (the previous dominion also encouraged P3s), the scale and fervour of the policy has not at any time been this great.

In May of this year, the guidance announced the creation of Partnerships British Columbia, an arm's-length agency with a mandate to encourage enable, and help implement P3 brews Partnerships BC will also be the government's conduit for involving the private sector in P3 issues. At the same time, a of the present day capital asset management framework was released that fixs the guidelines for determining which devises are to proceed as P3s1

P3 potential

In the nearest three to four years, the BC command is planning to launch between 15 and 20 P3 ranging from large-scale transportation plans to construction projects (potentially for modern hospitals and schools). To inflict the scope of these concocts into perspective, the provincial control has estimated a need for $10 billion in modern transportation infrastructure spending in the nearest decade, with P3s an integral part of the infrastructure's financing, design, construction, and operation.

P3 are being considered for upgrades to the Sea-to-Sky Highway, for a modern Vancouver/Richmond/Airport rapid-transit line, and major of the present day bridges and highways in the Fraser Corridor of the Lower Mainland. In addition, a major highway upgrade is being planned as a P3 for Kicking Horse Canyon, which trips from Kamloops to the Alberta border.

The province has also identified P3 as an important way for the province to afford the wanted infrastructure projects for Vancouver-- Whistler's 2010 Olympic bid. And in June of this year, it was announced that the recently made known Vancouver Convention Centre expansion would be built as a P3

Bob Skene FCA, Senior Vice President, Business growth and CFO of JobWave Canada in Victoria (see page 12) also notes that P3 in the service sector could be long more substantial than infrastructure shoot forwards although to date they have been largely have charge ofed by both government and the private sector.

With like large-scale projects and complex financial arrangements ahead, chartered accountants will certainly play a crucial part in the P3 process in BC

Benefits

There are three major benefits to P3 The principally obvious is that they provide a valuable source of financing for cash-strapped governments; another is that they can deliver rule programs more effectively; and a third is that they can screen BC taxpayers from public sector delineate failures.

"P3s enable the public sector to transfer financial risk and initial cash sweep along requirements to the private sector," says Skene "In these times of increasing sway deficits, P3s can reduce governments' spending horizontals for both mega and smaller projects"

Andy Shaw, CA, Partner, Financial Advisory Services of KPMG LLP in Vancouver, agrees that P3 are a valuable source of financing: "A long-term concession can besufficient for as an alternative source of financing and rule of operating a project that the control feels is necessary, but would not otherwise have the resources to undertake."

Brian Bentz, CA, AMEC's Director of P3 for North America agrees Bentz is no stranger to P3 having not long ago returned to BC after being othered to the United Kingdom to roll on the business development function for AMEC cast Investments Limited, which is responsible for P3 or Private Finance Initiative (PFI) draws there.

"P3s are about service delivery," he says, "and the single in kind particular benefit I see to BC is the potential to upgrade the provincial infrastructure quickly after many years of delay."

Which brings us to the secondary major benefit of P3s: improved efficiency.

"I am a powerful believer that the private sector can in in the greatest degree cases deliver government programs more effectively than the public sector," says Skene

Skene's belief has a certain number of impressive dollar figures to back it up According to reports from the UK overall savings from PFI casts have averaged 17% compared to traditional management as additional financing costs for the private sector have been more than branch by a reduction in operating costs2

Says Bentz: "P3 should bring to BC the same principal benefits they bring to principally jurisdictions-the provision of required services at the greatest value for wealth with little call on the now passing budget or debt capacity."

The final benefit-protection against public sector white elephants-was highlighted in May of this year, at a P3 discourse sponsored by the Canadian Council for Public Private Partnerships, where delegates were told that P3 arrangements would have saved BC taxpayers from failed public sector intends such as the fast ferries fiasco. Why? Because no private sector partner would have committed to like a major undertaking without a business plan. It's also highly unlikely that any private sector partner would have opened the poor project management practices witnessed in the building of the three ferries.