Canadian URBAN Institute Strong Regions - Strong National Economy REGIONAL ECONOMIC DEVELOPMENT AND THE IMPORTANCE OF PUBLIC-PRIVATE PARTNERSHIPS Bohdan S. Onyschuk, Q.C. Former Chair, CUI & Senior Partner, Gowlings February 23, 2011 Kyiv, Ukraine Canadian URBAN Institute - -- . 24 2011 Strong Regions - Strong National Economy Canadian URBAN Institute Cities and city regions in North America, Europe, Asia and South America are positioning themselves as the economic powerhouse for the 21 st Century Strong city regions mean strong national economies Strong economic growth = prosperity for the region To be strong, successful city region in the 21 st Century, you do not have to be the largest in the world The successful city regions are those that are: Clean Green Have clean air, water and soil Have nice parks Good roads Modern sewers Modern school Modern communications Good transportation They all have good new (or renewed) infrastructure And they attract the best young minds, and best modern companies in the world The Importance of Regional Economic Development Canadian URBAN Institute Most Livable and Most Sustainable Cities/City Regions The Economist Intelligence Units livability also uses data from the Mercer consulting group and shows cities in Canada, Australia, Austria, Finland and New Zealand as the ideal destinations thanks to a widespread availability of goods and services, low personal risk and an effective infrastructure. The Economist Intelligence Unit has been criticized by the New York Times for being overly anglocentric, stating that "The Economist clearly equates livability with speaking English. The report placed Vancouver, Canada as the most livable city in the world, with Vienna taking second place followed by Melbourne. The survey said "In the current global political climate, it is no surprise that the most desirable destinations are those with a lower perceived threat of terrorism. Three other Australian capital cities (Sydney at 7th and Perth and Adelaide at equal 8th) claimed positions in the top ten. Other Canadian cities also ranked highly in the survey. In addition to Vancouver, the Canadian cities Toronto and Calgary were also placed within the top 10. In the 2010 results, the Swiss cities Zurich and Geneva slipped out of the top 10, replaced by Adelaide and Auckland, New Zealand. Harare, Zimbabwe was rated the worst city in the world to call home. African and South Asian cities were generally the worst performing in the EIU's rankings. Pittsburgh is the highest rated US city.and en.wikipedia.org/wiki/World%27s_most_livable_cities Livable cities are defined by good modern infrastructure Canadian URBAN Institute Most Livable and Most Sustainable Cities/City Regions Most Livable Cities, according to the 2010 world wide survey, include: Vancouver #1 Toronto #4 Calgary #5 Canadian URBAN Institute Infrastructure and PPP But the cost of renewing infrastructure is very large Beyond the ability of the public sector to provide out of their budgets Therefore PPPs have been developed in the West To tap the private sector capital pools of: Banks Investment funds Pension funds Private sector infrastructure funds Infrastructure service companies Canadian URBAN Institute Roads Transit Systems Rail stations Airports Ports Energy plants (including nuclear) Digital fibre optic networks Water and waste water plants and systems Hospitals Schools Court houses Social housing Community centres P3 Infrastructure Projects Canadian URBAN Institute British Columbia Regional Projects Kicking Horse Canyon Phase 2 Pitt River Bridge and Mary Hill Interchange Canada Line Sea-to-Sky Highway Improvement Project Port Mann Bridge Yoho Bridge Golden Ears Bridge Abbotsford Hospital (1) Asia Pacific Gateway Canadian URBAN Institute $5 Billion infrastructure strategy BC, Alberta, Saskatchewan, Manitoba Rail, Roads, Bridges, Transit To bring Asian container ship traffic to North American markets 1 day sooner To Chicago, middle USA, & Eastern markets To be done through PPPs (1) Asia Pacific Gateway Canadian URBAN Institute British Columbia Gateway Projects Pitt River Bridge Golden Ears Bridge Port Mann New Park Bridge Canadian URBAN Institute (2) Sea to Sky Highway: British Columbia Canadian URBAN Institute Capital Cost:$789.9 Million Project Sponsor:British Columbia Ministry of Transportation Major Private Sector Partners:S2S Transportation Group: - Macquarie North America Ltd. (project manager, finance); - Peter Kiewit Sons Co. (construction); - Hatch Mott MacDonald (engineering); - Miller Paving (maintenance); - Capilano Highway Services (maintenance) Contract Term:25-year lease term Model:Design-Build-Finance-Operate & Maintain Notable mention:Best Global Project to Reach Financial Close-Public-Private Finance Awards, London, England in May, 2006 (2) Sea to Sky Highway: British Columbia (3) Canada Line, Vancouver, British Columbia Canadian URBAN Institute (3) Canada Line: Vancouver, British Columbia 19.5 km automated line, 16 stations, 3 water crossings Capital Cost:$2 Billion Project Sponsor:Canada Line Rapid Transit Inc. (CLCO) and Greater Vancouver Transportation Authority (TransLink) Major Private Sector Partners:Consortium InTransit BC: - SNC-Lavelin Group Inc.; - British Columbia Investment Management Corp.; - Caisse de depot at Placement du Quebec Contract Term:35-year lease term Status:Anticipated start of operation for November, 2009 for 2010 Winter Olympics Model:Cost-Design-Build-Finance- Operate & Maintain Canadian URBAN Institute New Brunswick Regional Projects Confederation Bridge Kicking Horse Canyon Phase 2 Pitt River Bridge and Mary Hill Interchange Canada Line Sea-to-Sky Highway Improvement Project Anthony Henday Drive Southeast Anthony Henday Drive Southwest Port Mann Bridge Athabasca Tar Sands Yoho Bridge Golden Ears Bridge Abbotsford Hospital TransCanada Highway Twinning Confederation Bridge, New Brunswick to Prince Edward Island Canadian URBAN Institute Confederation Bridge: New Brunswick to Prince Edward Island Capital Cost:$739 million Project Sponsor:Transport Canada Major Private Sector Partner:Strait Crossing Development Inc.: - VINCI Concessions Canada Inc. - BPC Maritime Corporation; - Strait Crossing Inc.; - Ballast Nedam Canada Limited Agreement Value:$1.5 Billion (est.) Status:Opened May, 1997 Model:Design-Build-Finance- Operate & Maintain Revenue Arrangement:35 years concession term (Toll revenues & fixed payments) Canadian URBAN Institute Capital Cost:$585 million Project Sponsor:New Brunswick Department of Transportation Major Private Sector Partners:- Maritime Road Development Corporation; - Miller Paving Ltd.; - Dragados FCC Group; and - Janin Atlas Corporation Contract Term:28 years (3 construction; 25 operating) Status:Complete in November, 2007 Model:Design-Build-Finance- Operate & Maintain Revenue Arrangement:30 year concession [Shadow toll arrangement] The Fredericton-Moncton Highway: New Brunswick Canadian URBAN Institute MoveOntario / Provincial Growth Plan and Renew Ontario Ontario Regional Projects Confederation Bridge Kicking Horse Canyon Phase 2 Pitt River Bridge and Mary Hill Interchange Canada Line Sea-to-Sky Highway Improvement Project Anthony Henday Drive Southeast Anthony Henday Drive Southwest Port Mann Bridge Athabasca Tar Sands Yoho Bridge 407 ETR Royal Ottawa Health Centre Golden Ears Bridge Abbotsford Hospital William Osler Hospital TransCanada Highway Twinning Canadian URBAN Institute Highway 407 ETR Toronto Region Canadian URBAN Institute 407 ETR (Electronic Toll Road): Greater Toronto Area, Ontario Status:Currently 108 kms in length with potential for additional growth Capital Cost: $1.6 Billion (1999) Project Sponsor: Ontario Ministry of Transportation Major Private Sector Partners:International consortium: - Grupo Ferrovial SA, CINTRA (19.3%); - Caisse de depot et placement du Quebec, (16.1%); - SNC- Lavelin Group (22.6%); - Macquarie Infrastructure Group (43%) Contract Term:99 years Sale Price:$3.107 Billion Model: Design-Build & Concession, PPP Revenue Arrangement:Toll revenues Canadian URBAN Institute Region of Peel, Province of Ontario population 1 million two water and wastewater treatment facilities operations and maintenance contract to private sector operator (OCWA) -- not a concession RFP/RFQ bidding process 10 yr + 5 yr renewal at a fixed price, plus escalators based on population increase strict environmental compliance standards asset management programme (but region to pay for capital improvements over time) Region collects water and sewer rates and pays the operator from this performance bond by operator, and guarantee by parent company of operator "best value for money" (and reduced cost) to Region Water and Wastewater Niagara Regional Healthcare Hospital 97,000 sq.m. hospital in St. Catherines, Ontario DBFM (design-build-finance-maintain) P3 model RFQ/RFP process $1.0 billion project under construction, to be completed by Dec private sector consortium: Plenary Group & Borealis Infrastructure -- equity partners, financiers -- PCL Constructors Canada constructors -- Johnson Controls Inc -- life cycle maintenance and management concession term for 30 years hospital to be managed by Ontario Healthcare system, but building management and building maintenance handled by private sector consortium 30 year long term bond financing, secured by Government of Ontario annual health care payments performance bonds and parent company guarantees insurance Thunder Bay Consolidated Courthouse Project Thunder Bay Consolidated Courthouse Project $250M project DBFM (design-build-finance-maintain) project RFP/RFQ process private sector consortium of: construction company, operator, and financial institutions short term construction financing, and then long term bond (from Canadian Life Assurance Co and Ontario Pension Board payment terms over 30 years following construction to cover -- construction -- building maintenance -- life cycle repair and renewal (heating and HVAC systems) -- project finance costs performance bonds, insurance and guarantees from the contractor Bruce Power Nuclear Station Canadian URBAN Institute Bruce Nuclear Power Plant: Kincardine, Ontario The largest nuclear facility in North America in terms of output and also the second largest nuclear facility in the world. Status:6 CANDU Units operational; Bruce A Units 3 and 4 to return to service by 2009 Capital Cost:$6 Billion Project Sponsor:Ontario Power Authority Major Private Sector Partners:Bruce Power LP - The Ontario Municipal Employees Retirement System (Finance); - Trans Canada Pipelines; - The Power Workers Union and Society of Energy Professionals Contract Term 25 years Model:Lease-Develop-Operate & Power Purchase Agreement - 5% ownership stake by the Power Workers Union and The Society of Energy Professionals Canadian URBAN Institute Regional Economic Development and the Importance of Public-Private Partnerships Bohdan S. Onyschuk, Q.C. Former Chair, CUI & Senior Partner, Gowlings February 23, 2011 Kyiv, Ukraine Thank You