Chief Peguis Trail Extension Project - PHASE 1 COMPLETE
Questions and Answers
Q1. What is being announced?
The completion of the new Chief Peguis Trail Extension, which is a year ahead of the scheduled completion date and projected to be on budget.
On July 12, 2010, a joint announcement was held with the Province of Manitoba and the City of Winnipeg, where Public Safety Minister Vic Toews announced that the Government of Canada would contribute up to $25 million to support the extension of the Chief Peguis Trail in Winnipeg to relieve traffic pressure on residential streets.The Province of Manitoba, the City of Winnipeg and DBF2 Limited Partnership (DBF2), the private consortium selected to design-build-finance and maintain the roadway and structures, will finance the remainder of the project's construction costs.
Q2. Under which federal program will the project be funded?
The federal investment for the project will come from the P3 Canada Fund. Through this investment we are looking to leverage greater value, timeliness and accountability in the delivery of this critical infrastructure.
Q3. What is the P3 Canada Fund?
The P3 Canada Fund was created to improve the delivery of public infrastructure by leveraging better value, timeliness and accountability to taxpayers through P3s. This Fund is the first infrastructure-funding program, anywhere in Canada, which directly targets P3 and AFP projects. The fund is administered by PPP Canada, a federal Crown corporation recently established to support the development of P3s and facilitate the development of the Canadian P3 market.
The P3 Canada Fund is a merit-based program which helps deliver quality infrastructure, by co-funding public infrastructure projects which are best procured via a public-private partnership ("P3").
PPP Canada works with provincial, territorial, municipal, First Nations, federal and private partners to support the greater adoption of public-private partnerships in infrastructure procurement. To be eligible for a P3 Canada Fund investment, the infrastructure project must be procured or supported by a province, territory, municipality or First Nation (i.e., a public authority).
The P3 Canada Fund complements other components of the Building Canada Plan, and Canada's Economic Action Plan. Each infrastructure project considered by the P3 Canada Fund must contribute to: fostering economic growth; supporting a cleaner environment; and/or promoting stronger communities.
Q4. What are public-private partnerships?
P3s are an alternative method for governments to meet public infrastructure needs. Through long-term P3 contracts that encompass design, construction, financing, maintenance and operation components, governments can access private sector expertise, technology and capital.
Unlike traditional procurement, P3 projects provide the private sector with a greater role in the design, building, financing, and/or operation of public infrastructure and offer a unique business opportunity, allowing private companies to deliver a broad range of services in different industrial sectors over a long term concession period (typically 25-35 years).
Q5. What are the benefits of public-private partnerships?
Governments around the world are increasingly turning towards P3s to improve the delivery of public infrastructure. In many cases, P3s are a better way for governments to meet some of the public infrastructure needs of Canadians, especially where projects are large, complex and where innovation can reduce lifetime costs and deliver better infrastructure. They offer three major benefits: cost-savings, time-savings and they transfer much of the financial risks associated with public infrastructure away from the taxpayer.
The Government of Canada is committed to supporting the adoption of P3 procurement, where they can deliver better value for money than traditional procurement.
Q6. Why chose a P3 over traditional procurement for transportation related infrastructure?
P3 projects involve greater consideration of whole life cycle, they engage the expertise of the private sector, they ensure private sector capital is at risk bringing capital market discipline and incentives, and they allow the public sector to focus on its core business.
The City's external financial advisors carried out a Value for Money assessment. The final VFM results demonstrate that the PPP approach provides the City with estimated value savings of approximately $31 Million, in comparison to the traditional delivery approach. This represents a 17.6% savings.
Q7. Wouldn't P3 procurement be considered privatization of assets?
No, P3s use a concession agreement structure and ownership of new infrastructure either remains with the government or reverts to the government at the term of the contract. The government retains full control of the outcomes of the project. Citizens who have concerns about their public infrastructure can still call their government representatives and, in fact, the private-sector concessionaire doesn't get paid if it doesn't meet performance objectives.
For clarity, the City owns the roadway and structures at all times. The City provides DBF2 with non-exclusive access to and use of relevant lands for the purposes of executing the Project, via a licence granted in the Project Agreement.
Q8. How many jobs are being created by this project?
This project will create engineering, construction and maintenance jobs for the next 30 years, over the life of the concession. It will also support local businesses involved in the construction industry and encourage local economic development.
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