This week we continue our discussion on P3's (Public Private Partnerships) with longstanding NAIOP Vancouver member and current Vice President, Graeme Silvera. Read on to find out his views on the Government's decision to pursue P3 projects in spite of public opposition, as well as the environmental sustainability of these types of projects.
Be sure to catch Part 1 and Part 2 to get the full scoop on this method of project delivery.
Isn't there a lot of public opposition to P3's? Why should Governments use a method of project delivery that is controversial with voters?
At the outset of the development of the first P3's, which actually started in the UK in the early 1990's as the PFI, or Private Finance Initiative, they were controversial for the reasons stated previously; perceived higher cost, contracting out public sector jobs and loss of control. Early success in the form of projects delivered on-time and on-budget, with proven independent value-for-money reports and refinements in the Project Agreement structures, including posting of contracts and key procurement documentation on-line, has managed to quell most of the opposition over the years. P3's are now not only recognized for delivering significant value for money, but also providing much greater transparency in delivery when compared against other traditional methods.
The current opposition to P3's remains primarily with the larger public sector unions who continue to assert that P3's will result in the contracting out of high-paying public sector jobs. I believe that this last objection is also soon going to be removed, as the majority of our company's projects are required to take over existing unionized staff and contracts within the context of our operational plans. From the public perspective, I believe that P3's are now seen as a winning delivery method that see large public infrastructure projects being completed on-schedule and on-budget and being maintained over the long term, with clear reporting and transparency to the taxpayer. But don't take my word for it; a 2011 poll commissioned by the national non-partisan Canadian Council for Public Private Partnerships showed public support for P3's at 70%, continuing the upward trend from 60% in 2004.
What about the environmental impact; are P3's an environmentally sustainable method of project delivery?
Over my varied career I have worked in both the public and private sectors using many different project delivery methods ranging from Design-Bid-Build Stipulated Sum contracting to Construction Management at Risk. I am also LEED certified and am familiar with sustainable construction methods. Before I started working on P3's I used to believe that sustainability was primarily related to the energy efficiency of a building, dealing with construction wastes and the types of materials used in the construction. After working in the P3 delivery method for the last 5 years I can now say that my definition of sustainability has widened considerably.
I now believe that P3's are among the most sustainable method of delivering projects for the following reasons:
- "Super integrated" Project Delivery - All sustainable projects have at their core an integrated design team process, but on a P3 the design team is forced to consider all aspects of the design in every decision made. Contractual obligations between the Designer, Operator and Builder cause the design team to consider each design decision from the perspective of what I like to call the RECOMMEND protocol; that is the decision that considers the aspects of Replaceability, Energy use, Constructability, Operational efficiency of the spaces, Maintainability, Material suitability, Efficiency and Durability.
- The inclusion of a long term guarantee of durability and life cycle with the P3 structure literally forces the team to consider the overall best solution for the project that produces the "lowest overall life cycle" cost. The lowest overall life cycle cost is also inherently the most sustainable solution. P3's, with their requirements for guaranteed maintenance and handback, are the only project delivery solution that can deliver these types of results time and time again.
What are your thoughts on P3's? Do you support or oppose this method of project delivery in British Columbia? Share your thoughts in the comments sections below.
Thanks to Graeme Silvera for taking the time to sit down with us and discuss this growing form of project delivery. Don't forget to tune in next week for more instalments in the Industry Leaders Blog.