Near completion of Infrastructure Ontario’s public-private partnerships shows further potential in North America

Ontario’s successful approach in addressing a deficit in hospital and other social infrastructure during the past decade under Infrastructure Ontario (IO) will now be focused on delivering historic investments in the province’s public transit and other transportation needs. 

Ninety-eight per cent of IO’s first 45 projects using the public-private partnership (PPP) model – also known as Alternative Financing and Procurement (AFP) – were completed on budget and 73 per cent were finished on time, according to a third-party assessment of those PPP projects to reach substantial completion.

“The Ontario government has committed to a historic investment in public transit and transportation infrastructure – IO will help deliver on that promise by using the proven modern procurement tools it has developed through its AFP program,” said John McKendrick, IO Executive VP of Social Project Delivery. McKendrick shared IO’s impressive track record and its outlook for the Province’s 12-year, $160-billion commitment to infrastructure on “Industry Day,” as part of an international real estate conference held this week in Toronto. COBRA (Construction and Building Research Conference) is RICS’s annual construction, building and real estate research conference. This year, COBRA convened in Toronto September 19-22 in partnership with George Brown College.

A public–private partnership is a government service or private business venture funded and operated through a partnership of government and one or more private-sector companies. A paper on “Measuring PPP Success” presented at COBRA said that governments globally are increasingly adopting the model because it is an innovative procurement approach in delivering value for money in public infrastructure. 

The PPP model for infrastructure has had varying degrees of success in North America, which is why the Ontario success is so significant. Former U.S. Treasury Secretary Dr. Lawrence Summers addressed this issue earlier this year during the first RICS World Built Environment Forum, held in Washington, D.C.  During his keynote address, Dr. Summers contended that governments are “missing an opportunity” to invest in much-needed infrastructure renewal. He referred to political and investor doubts that projects will be completed on time and within budget as an important factor in underinvestment.

RICS is extensively involved in infrastructure efforts beyond COBRA, especially in the coming year. The organization is sponsoring a series of roundtables on infrastructure that will culminate in a major study to be released next May during the 2017 RICS Summit of the Americas in Chicago.

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