Stepping Out

With the P3 market evolving and expanding across North America, Dan Colombini speaks to Plenary’s Mike Marasco about the firm’s plans for the future

When it comes to individual contributions to the rise of North American P3s, they don’t come much bigger than Mike Marasco’s.

Now leading Plenary as CEO of concessions, Marasco is firmly placed at the forefront of the private sector’s drive to develop Canadian infrastructure. But he has not always been a private sector player.

Prior to Plenary, he spent 26 years in the public sector in British Columbia, working on large-scale capital real estate projects. After working on the successful Abbotsford Hospital P3 as a VP at Fraser Health, he was recruited to be part of the leadership team that launched Partnerships BC under original CEO Larry Blain, who was given the reins under then-Premier Gordon Campbell.

The rest, as they say, is history. “That was very exciting to be able to build something that had governmental and political support,” he explains. “For the time that I was there we did about $4.7bn-worth of deals in every sector that you can think.”

This work solidified Partnerships BC as the entity we know today. And there is no argument that the organization has been – and continues to be – instrumental in shaping the Canadian market’s recent achievements.

Despite the rapid success of the agency, Marasco opted to make the shift across sectors and joined Plenary in 2007, where he then used his skills to help grow that organization into the P3 giant that it is today.

“At the time we only had six employees and had one deal closed and were preferred bidder on another, so it was quite a shift moving from government to what was basically a start-up entity,” he says. “But I don’t look back with any regrets; to be able to work on both sides of the growing P3 market was exciting.”

Marasco is therefore extremely well-placed to oversee Plenary’s latest challenge: an expansion into the growing American market – where he sees major opportunities over the next few years, despite (or perhaps because of) the recent controversial election result that will see Donald Trump move into the White House.

“I keep reminding everyone in our organization that Canada is almost the size of California in terms of population and infrastructure needs so the opportunities across the whole country are huge,” he stresses. “Trump has a very aggressive infrastructure plan and knowing his commitment to the private sector, we are optimistic that there will be big opportunities for P3.

“If you think about it, a lot of P3s in the US are driven by the state and local government level, especially on the social infrastructure side. So I don’t see that Trump’s plans will impact that negatively. If anything, he will be the type of person that is prepared to tear down the bureaucracy of things like federal scoring and other such issues, which could bring more federal deals to the market.”

Under this new regime, the firm will be focusing on key states such as California, Colorado and Florida as it seeks to align its successful Canadian program to the market south of the border. But Marasco acknowledges that the two markets have significant differences. And while Canada has been no stranger to political changes of its own over the past year, the type of problems that can be faced in the US represent a whole different ball game.

This is something he believes can only be tackled by taking the time to consider exactly who will be the right partner on a project.

“Our strategy is to find the right partner for each of those opportunities,” he says. “One thing that we learned early on is that you have to have a strong local content on your project to understand the labor market, the political environment and the challenges in the region.

“We will continue to grow the business as the pipeline emerges. We will also continue what I call missionary work on behalf of the industry to introduce the model and the benefits to new and prospective clients. And although we won’t win all those deals that we focus on, it creates new opportunities and builds momentum in the market.”

But as this momentum builds, the nature of the political beast in the US makes planning increasingly difficult in the long-term. Marasco is therefore very clear on the importance of the role the private sector must play in spreading the word on the benefits of P3.

After all, time and again in the US, the market has demonstrated that if the industry doesn’t continue to rally then dissenting voices gain momentum, and the undeniable good work that has been achieved can become drowned out.

But he is positive that lessons are being learned on the public sector side. “Ever since the cancelled Indianapolis Justice P3, most public sector entities that have heard that story are now trying to make efforts to put belts and suspenders on, so to speak, to mitigate the risk of failure after there have been bids in on a project.

“We have a role to play in that too, so that will be part of our work in the US. The same goes for our competitors.”

With reference to his past experience, Marasco also now sees a role for regional or dedicated procurement agencies in the US as a means to stabilize the market and deliver significant knowledge on how to best utilize P3s. He cites the work currently going on at the Office of Public-Private Partnerships in the District of Columbia that is now developing a pipeline.

“What we are seeing there is a fantastic model and I hope that is adopted elsewhere,” he says. “Another good example is the Texas Center of Excellence,” he adds. “Although they haven’t brought a project to market, we are optimistic that they will. If that works then it will set a precedent.”

Bread and butter

So, while momentum builds in the US, where does that leave Plenary’s focus on the more stable Canadian market, particularly amid the changes going on under the Liberals?

Despite the expansion plans across the border, Marasco is adamant that Canada remains the firm’s “bread and butter” in the near term.

With the Liberals recently announcing the creation of a federal infrastructure bank, the lines of what role the key P3 developers will play in the future have been somewhat blurred.

As a result the likes of Plenary are viewing the recent announcement with something akin to positive caution.

Marasco believes that the bank could be very positive to make projects viable through a credit support mechanism. For example, the need for infrastructure among First Nations is not getting any smaller and this is one area where this proposal could flourish.

“Another role is for the feds to provide program management that helps them bundle projects to a size that would be of interest to the market,” he adds.

As the New Year draws nearer, both the US and Canada reach new levels of maturity and with that comes new challenges.

But this is something that Marasco feels the firm is well placed for. “I think we are prepared for these shifts,” he concludes. “Ultimately, both are set to bring about new opportunities, so we will be there to build on that.”