The Role of PPP in Supporting Saskatoon's Growth

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Saskatoon Regional Growth Summit, Olivia MacAngus

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The Role of PPP in Supporting Saskatoon's Growth

  1. 1. The Role of PPP in Supporting Saskatoon’s Growth Olivia MacAngus
  2. 2. PUBLIC-PRIVATE PARTNERSHIPS
  3. 3. The PPP Structure What Is It? • A contracting approach for the delivery of public infrastructure, characteriz ed by: – Fixed-price delivery – Fixed schedule for delivery – Single bid, integrating design, construction and asset management to produce low 30-year cost and better performing assets – Defined performance guarantees by the concessionaire When to Use It Is it public infrastructure? Is the capex > $80100 million? •Greenfield roads, bridges, community centres, WTP, WWTP, convention centres, etc. Is there a significant •PPP locks in pricing & performance for long-term asset maintenance & management lifecycle requirement? replacement. Can performance specifications be clearly defined?
  4. 4. Some Characteristics of PPPs in Canada • A variety of models: – Each province has a unique solution – Most reward technical compliance and low 30-year price – New focus on design solutions that reduce service delivery costs (adjacencies, daylight, LEED design) • Typically not revenue generating assets for the concessionaire – Few toll roads – Any revenues typically flow to the public sector partner
  5. 5. The value of PPP in a “hot” market • Meet infrastructure needs sooner: – typically faster delivery timelines (~ 3.5 - 4 years for facilities; 3 years for roads) – driven by low NPV evaluation & substantial completion payments • Fixed price contracts provide budgeting predictability • Concessionaire is at risk for long-term asset performance – takes risk of labour pool, supply chain over 30 years
  6. 6. Plenary Group Case Study The Melbourne Convention Centre Precinct • Multi-use project with civic and commercial components • Catalyst for Urban Renewal • Leveraged commercial components and private investment to enhance civic components • Created a premier destination out of what was previously an underutilized area
  7. 7. Philosophy • Maximise Urban Renewal • Exceed PPP Brief • Commercial Synergy • Active Equity • Aggressive PPP financing given State retention of demand risk 7
  8. 8. Project Overview – Core PPP Design, Construction, Financing and Maintenance • New Convention Centre – 5,000 seat plenary hall – 4,800 sq m meeting rooms – Pre-Function space – Back-of-house facilities (e.g. foyer, kitchen, loading docks, etc) • Integration with existing Exhibition Centre • Bridge across Yarra (no maintenance) 9
  9. 9. Project Overview - Development – Residual land made available – Proponents invited to masterplan – State had reasonably low expectations of any premium to land value – State expected non-underwritten future development proposals 10
  10. 10. By the Numbers • The convention centre project achieved the following investment Total Investment State Contribution Private Sector Core Convention Centre Hotel Retail / Office / Residential 11 $1400m $370m $1030m $550m $150m $700m
  11. 11. 12
  12. 12. Convention Centre Link 13
  13. 13. Pedestrian Bridge 14
  14. 14. Porte-Cochere Entrance 15
  15. 15. Convention Centre Foyer 16
  16. 16. Plenary Hall 17
  17. 17. 18
  18. 18. 19
  19. 19. Hotel Foyer Hotel Destination Bar 20
  20. 20. Room Interior 21
  21. 21. Commercial Development 22
  22. 22. South Wharf Retail Key design features, elements and capacities of the South Wharf Retail include: • Riverside restaurants and cafes • Office tower • Residential townhouses • Lifestyle retail • Entertainment Hub including art house cinema and rock climbing facility • Premium brand homemaker retail complex • Car parking facilities 23

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