Elements of a Successful PPP
Program
Puerto Rico Projects Conference
October 22, 2009, Puerto Rico
Susan Tinker, Vice President, Partnerships BC
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Overview
 Partnerships BC
 B.C. – Puerto Rico Comparisons
 Phases of Development
 Conclusion
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Partnerships BC – Overview
 Created in 2002: evaluate, structure, implement PPPs
 Centre of procurement expertise
 Board of Directors
 Governance
 Recommendations to Province
 Staff of 45
 Projects
 Best Practices
Kicking Horse Canyon Park Bridge
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Early
Project
Screen
One to
two
weeks
PPP Process Overview
Business
Case &
Design
Concept
2 months
to 2 years
Issue
RFQ
Issue RFP
Negotiate
4 to 18 months
Design
Construction
Maintenance
2 to 4 years
Contract Term
(~15 to 40 yrs)
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B.C. – Puerto Rico Comparisons
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Impetus for PPP Program
 B.C., like Puerto Rico, developed a PPP program to
manage specific challenges.
 1990s: Significant infrastructure gap
 Governments of the day fell behind on investments
 Most dramatic needs in health, education and transportation
 High profile traditional procurement problems (scope,
schedule, deferred maintenance)
 2000s: Commitment to address gap
 $6-8 billion in capital spending
 Introduction of PPP approach
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PPP Program
Puerto Rico
B.C.
 Purpose of program relates to
accelerating infrastructure;
allocating risk; improving
services; improving economy
 Purpose of program relates to
better management of
infrastructure; allocating risk;
improving services
 Creation of dedicated agency
 Creation of dedicated agency
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Policy Framework
Puerto Rico
B.C.
 Strong political commitment
 Strong political commitment
 Framework enshrined in
legislation
 Framework established by
policy
 Will lead to high level of
consistency across projects
 Flexibility to change mandate
and approach
 Less consistency across
projects in early stages of
program development
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Project Governance
Puerto Rico
B.C.
 Partnership Committee to
govern each project is required
by legislation
 Best Practices recommend
strong governance model
 Critical to success of PPP
projects to show market
stability and expedite decision
making during procurement
and negotiation
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Approval Process
Puerto Rico
B.C.
 Legislation describes
Committee, agency and
Governor approval
requirements
 Project team, Steering
Committee, Treasury Board
 Streamline approvals to
ensure market can hold prices
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Contract
Puerto Rico
B.C.
 High level contents similar to
B.C. contract
 Standard and consistent
contract documentation
 Project specific collaborative
meetings
 Result is no mark-ups with
proposals; expedited
evaluation and negotiation
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Committed Finance
Puerto Rico
B.C.
 Legislation allows instruments
for ensuring committed finance
 Have worked with different
instruments
 Committed finance essential to
avoid renegotiation of key
terms
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Assignment of Rights
Puerto Rico
B.C.
 Legislation allows private
partner to assign rights
 Initially allowed all refinancing
and change of control
 Revision to contract to limit
these activities in early stages
of contract
 Change causes disruption
during critical design and
construction period
 Change raises concerns in
public arena
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Phases of Development
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Phase 1: Build Capacity
 Extensive market sounding
 Market consultation
 Commercial terms
 Appropriate risk allocation
Britannia Mine Water Treatment Plant
 Development of basic best practices
 Consistent documentation and process
 Disclosure and transparency
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Phase 2: Refine Policy and Practice
 $50 million capital standard policy
 Project governance strengthened
 Greater consistency in procurement documentation,
commercial terms and process
 Limited mark-ups to Project Agreement in health sector
Surrey Outpatient Hospital
Royal Jubilee Hospital Patient
Care Centre
Kelowna Vernon Hospitals Project
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Phase 3: Market Maturity
 Managing budgets from approval to financial close
 Planning for business cases
 Managing market expectations
 Clear evaluation criteria
 Affordability line
 Scope ladder
South Fraser Perimeter Road
 Need for temporary credit measures
 Project pipeline
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Conclusion
 Political and stakeholder support
 Enabling policy framework
 Focused delivery agency
 PPP market development
• Informed public sector attracts market
 Focus on best practices and consistency in execution
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