Analysis: Alberta’s Wishlist

Difficult economic times will mean new solutions as the province looks to enter the world of unsolicited proposals

“As we move forward with pursuing P3s, Alberta is open for business, that’s the message,” Infrastructure Minister Prasad Panda told the market during a Canadian Council for Public-Private Partnership (CCPPP) webinar in September – but with an unprecedented and ever-developing situation, what form will these P3s take, what are the projects, and when will we see them?

As the province’s deficit skyrockets to CAD$16bn over the forecast yearly budget to an astronomical $24bn, the magnitude of the pandemic’s economic impact is coming into focus. Minister of Finance Travis Toews labelled the figure “incredibly sobering”, and it’s not just the government taking notice.

In light of the deficit news, ratings agency Moody’s placed Alberta’s credit rating on review, with a potential downgrading on the horizon.

“To deal with this challenge our government is developing a path forward,” Toews said. “A path that will see job creation, diversification and stability restored.”

With $10bn of the recovery plan designated to be spent on infrastructure, aiming to creating 32,000 jobs, getting the deployment of these funds right will be crucial in getting Alberta up and running again.

“We’re also looking at different tools to deliver the infrastructure, getting back into the P3 arena is critical,” said deputy infrastructure minister Shannon Flint, laying out the vision for the coming months.

Just prior to the webinar, Alberta had shown its willingness to engage the P3 market - releasing a Request for Qualifications on a five-school bundle, having earlier opted to cancel a similar bundle and deliver it with public funds instead. That decision had been taken to “get construction underway as quickly as possible”, Panda said at the time.

In fact, there has been a surge in P3s across the state in the past few months, and not just by the province’s central government.

The city of Wetaskiwin has released a request for expressions of interest for a wastewater plant, while Edmonton’s Norquest College and Covenant care are waiting for proposals on a new multipurpose elderly care centre.

On a larger scale, the city authorities of Edmonton and Calgary are taking important strides with their light rail megaprojects, with both recently releasing three-team shortlists for the Green Line and Valley Line projects respectively.

Continuing the wave, the central government is planning more – opting to use P3s as the “preferred delivery option for any project above $100m”, Panda said.

“Within our P3 project pipeline we are exploring alternate financing options for a new Alberta hospital in the south of Alberta, Deer Foot Trail expansion in Calgary, and various highways commercial rest areas, and a the Calgary-Banff rail project,” he added.

Exploring alternative financing options, including P3s, is something the Alberta government has been urged to do for some time.

Most recently, the executive director of the Alberta Construction Association, Ken Gibson, said that “dramatic swings in the levels of infrastructure investment undermine contract planning and investment”, instead urging the government to develop “new models of capital funding and project procurement…including public-private partnerships”.

These pleas have not fallen on deaf ears . “We’re open to new ideas,” Flint said, including creating “an unsolicited proposal process”.

The idea of accepting unsolicited proposals was hinted at in the procurement of a multi-site retrofit bundle in the province earlier in the year, which mentioned that it would be willing to receive proposals for projects not in the bundle – a tender that received interest from nine firms.

It appears the decision-makers really mean business: “We are in the process of updating the P3 framework guidelines,” Flint said. “We are looking at broadening the definition of traditional P3s, and we have been working closely with Infrastructure Ontario and British Columbia to understand how that’s been successful.

“We are looking to expand the breadth and depth of P3s that we have traditionally done to move untraditional ones that Alberta’s looking at,” she continued, in a bid to harness the innovation and creativity of the private sector.

“The unsolicited proposal framework should also help create a new vein of approaches in projects moving forward.”

The new framework is expected to be put forward to the cabinet “as soon as possible”, with Panda estimating that it may take a few months.

Panda and his colleagues appear eager to encourage as many new ideas as possible, and were keen not to put limits on the types or scale of projects that might be possible through an unsolicited proposals system. Proposals could cover all types of projects, from broadband developments to hyperloops, to a new high-speed rail link between Calgary and Edmonton.

“P3s will present us with a lot of ideas and we want to leverage the private sector capital to find technological solutions, innovation and expertise by bringing in contractors through this unsolicited P3 submitting,” said Panda. “It may not be practical, but we have a wishlist of projects. The demand is more than we can provide.”

Finally, he threw down the gauntlet to the market: “See if you can submit unsolicited proposals for some of those projects.”