Case Studies of the 2000 Award Winning Projects
for Infrastructure, Service Delivery and Financing

The Canadian Council for Public-Private Partnerships established a national awards program in 1998 to recognize the achievements of those who are leading the way in innovative partnerships across Canada, and to raise the profile of public-private partnerships in this country. The legacy of the awards program is the documentation of the projects from each category in this publication so that others may learn from their experience and draw upon the lessons learned on the way to their implementation.

The Council defines a public-private partnership as, "a cooperative venture between the public and private sectors, built on the expertise of each partner, that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards." Three categories of public-private partnerships have been established in which to consider projects: finance, service delivery and infrastructure.

This is the third year of the awards. A national panel of experts in the field selected the winners from the 28 nominations. The winners were announced at the Council's annual conference in November in Toronto. The Canadian Council for Public-Private Partnerships partners with a number of public and private organizations to host this program. Sponsors for the 2000 National Awards Program include:

·         Industry Canada
·         Ontario SuperBuild Corporation
·         IBM Canada Ltd.
·         Arthur Andersen LLP
·         PricewaterhouseCoopers Securities Inc.
·         TERANET

The case studies are distributed to the Council's more than 170 member organizations from the business community and all levels of government across Canada. In addition, The Canadian Council for Public-Private Partnerships and Industry Canada post summaries of each winning project on their respective websites. Non-members may purchase copies of the full report from the Council, a non-profit organization.

In 2000, the selection panel chose a Gold Award winner for financing and for infrastructure, and gave three Awards of Merit for service delivery. No project met the criteria in the service delivery category this year and, therefore, no award was presented.

Case studies

The case studies in this publication cover the following:

·         The Gold Award for Financing was for the refinancing of the Belledune Port Authority's federal debt through a private placement of Secured Trust Notes. The Notes were secured by revenues from a long-term lease with NB Power which uses one of the wharves. This is the only non-bank financing of a port. The private partners were PricewaterhouseCoopers Securities Inc. and First Canada Securities Corporation.

·         The Gold Award for Infrastructure was for the construction and operation of Skyreach Place, a new sports and entertainment facility in Kelowna, B.C. The City of Kelowna successfully partnered with RG Properties Ltd. to create a modern ice rink and award-winning concert venue. RG Properties will own and operate the arena for 30 years, at which time it will be transferred to the City.

·         An Award of Merit for Service Delivery recognized the partnership of Ontario Exports Inc. and Interhealth Canada Limited, which won Canada's largest, overseas public-private contract in the face of stiff competition. Exporting Canadian expertise in healthcare, Interhealth will operate and manage Abu Dhabi's first trauma and tertiary hospital, the Shaikh Khalifa Medical Centre. As a result, nationals in Abu Dhabi no longer have to travel overseas for specialized treatment.

·         An Award of Merit for Service Delivery recognized British Columbia's first public-private partnership for the delivery of municipal water. The District of Port Hardy has partnered with EPCOR Water Services to build and operate a new water treatment plant so that, for the first time, the residents of Port Hardy have clean, clear tap water. The arrangement is the first public-private partnership for a water utility in British Columbia.

·         An Award of Merit for Service Delivery went to a partnership between the Ontario Government and an alliance led by Bell Mobility Radio Inc. that will improve emergency services communication. This public-private partnership is implementing a state-of-the-art, mobile communications network. Under this arrangement, for the first time, emergency services such as police, fire and ambulance will pool their resources and share a common infrastructure. This will result in an enhanced capability to communicate both among and between services.

Observations

The case studies provide some interesting insights into public-private partnerships in Canada. In previous years, the Council highlighted the capacity of these partnerships to:

·         get major projects done faster, sooner and at lower cost to the taxpayer than
        traditional methods;
·         generate jobs and economic growth;
·         create opportunities for exporting Canadian expertise; and
·         create high-quality infrastructure.

In addition, last year's award-winners showed that:

·         flexibility is important, particularly if the partnership involves emerging
        technological solutions;
·         partnerships can be a powerful developmental tool;
·         projects can be all sizes;
·         it is essential to know the risks; and
·         financial markets and institutions are supporting public-private partnerships.

This year, the award-winning cases have contributed further insights into how the public and private sectors can form a successful partnership that will achieve results beneficial to both partners.

Private placement market will finance a public asset

Refinancing the Belledune Port Authority's debt showed that the private placement market is willing to finance a public asset under certain conditions. In this case, taking a security interest in the revenues from NB Power's long-term lease with the port as the primary security, and structuring credit enhancements in lieu of specific guarantees, through the use of structured reserve funds and a priority of payments, satisfied the private investors that the investment was sound.

Thorough preparation oils the wheels

Several of the case studies emphasize the benefits of doing your homework and being well prepared before developing the partnership agreement.

At Skyreach Place, the City of Kelowna and RG Properties Ltd. had to work within the complexities of the BC Municipal Act in order to build a new sports and entertainment complex. These negotiations were long and difficult. Having a thorough understanding of the relevant legislative requirements before entering negotiations with a partner can speed up the process of developing the fine print of the contract.

An active and detailed consultation process between the Government of Ontario and the private sector prior to issuing a Request For Proposal to build and operate an emergency services mobile communications network meant that both the public and private sectors understood what was required and what was possible. This pre-consultation process facilitated the negotiation phase with the winning Bell Mobility alliance.

In the District of Port Hardy, B.C., where the proposal of the municipality and EPCOR to build and operate a water treatment plant was subject to a counter-petition period, a well-managed public relations campaign ensured that the public was fully informed. As a result, the local residents gave their support to the project.

Political will and determination are essential

A champion who is determined to drive the process forward, and to find solutions to any and all obstacles, is often a pre-requisite for a successful partnership.

Georges Marcoux initiated the process by which the Port of Belledune would become a Canada Ports Authority, made frequent contact with all involved, and argued forcefully during difficult negotiations for the port's best interests. It is likely that without his drive the Port of Belledune might not be a Canada Port Authority today.

The City of Kelowna had been trying to find a way to build a new sports and entertainment arena for over ten years. Both the mayors who were elected during this period and two of the councillors worked hard to develop strong and unanimous political support for the project. City staff were also determined to see the arena built and devoted long hours to accomplishing this goal, despite the difficulties of finding the right partner and the right way to structure the arrangement. If anyone had faltered, the City of Kelowna might still be waiting for an arena.

The other cases had similar champions, both public and private partners who were persistent in their determination to find the right partner, win the bid or accommodate the interests of multiple stakeholders.

Manage the deadlines

Meeting deadlines is a critical goal. For the public sector, extended deadlines means delaying the service. For the private partners, who are subject to the pressures of competition and demands of shareholders, failure to meet deadlines can have adverse financial consequences.

Referring to Skyreach Place, Graham Lee of RG Properties Ltd. said it was important to meet deadlines even if that meant long hours. Undertaking to work out disagreements between meetings ensured they were not delayed. He pointed out that projects that eventually do not work often do extend deadlines. Skyreach Place was completed on time.

Both partners of the Emergency Services Mobile Communications project emphasized the importance of having a structure and process in place to ensure conflicts are resolved in a timely manner and deadlines met.

Know the importing country's business culture

The partnership of Interhealth Canada Ltd. and Ontario Exports Inc. has won a major contract to export Canada's healthcare expertise. A key lesson from their experience is the importance of knowing and understanding both the structure and the nuances of the importing country's business culture. Also to be aware that the rules are different in the international market place and it can be misleading to make any assumptions. This supports the proposition that it is critical to be well prepared.

Timing is an essential element

Some partnerships come together because the timing is right. It may be that both partners are at the same stage at the same time, as occurred at Port Hardy. With the Skyreach Project, RG Properties initially declined to bid on the project but waited until it had the right experience in building ice rinks.

Al Wahba, Ontario Exports Inc., described the critical success factors as the five Rs. Right place. Right time. Right project. Right partners. Right price. Though he was referring to the Shaikh Khalifa Medical Centre project, these factors could apply to all successful public-private partnerships.

Download (PDF file)