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Infrastructure needs $130B investment

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by Peter Kenter last update:Jun 2, 2006

Canada needs to spend $130 billion or more in new work and upgrades of older infrastructure assets the Canadian Council for Public-Private Partnerships annual conference heard.

PPP Council ‘State of the Nation’

Canada needs to spend $130 billion or more in new work and upgrades of older infrastructure assets the Canadian Council for Public-Private Partnerships annual conference heard.

It’s a chicken-and-egg PPP scenario delegates were told; either suitable infrastructure projects must be initiated by governments to attract billions of dollars in readily available private funds, or private investors must show timid governments they’re raring to open the cash floodgates on suitable public-private partnerships.

The “State of the Nation” session of the Council’s 13th Annual Conference—Canada’s Missing

Infrastructure: The Role of PPP in Bridging the Gap—grappled with ways to engage private investors in public infrastructure projects.

Presenters from provincial governments across Canada provided a massive public infrastructure wish list, but if any unified message emerged, it’s that isolated infrastructure enhancements mean little outside of a broader economic context. For example, B.C.’s seaport expansion projects, part of the province’s $3-billion Pacific Gateway Initiative, will depend on other infrastructure enhancements to make them relevant. “Some of the expansions we need to undertake cannot take place unless we also make infrastructure investments in rail and particularly in the road network,” said BC’s Minister of Transportation, Kevin Falcon. “If you try to do one without doing the other, all you would do is create enormous gridlock.”

Even cash rich Alberta, recognizes the importance of PPP strategies across the country. “It’s very hard to talk about PPP when you have money,” said Lyle Oberg,

Alberta’s Minister of Infrastructure and Transportation. “But the days where we think of Alberta or Ontario or Quebec or BC in isolation, quite frankly are gone. The Pacific Gateway Strategy was announced by the federal government in British Columbia. There’s not a cent of the [federal government’s] $600 million spent in Alberta, yet I participated in the announcement—that money spent in British Columbia is excellent for Alberta.”

Provincial government representatives also presented some differences in their approach to PPP. Pierre Lefebvre, CEO of l’Agence des partenariats public-prive du Quebec even broached the subject of PPP involvement in the province’s water resources, a sacred cow in some parts of the country. “User fees will allow us to manage water consumption patterns in Quebec and will justify the increase in investment in water treatment facilities,” said Lefebvre. Ontario’s Minister of Public Infrastructure Renewal, David Caplan, on the other hand, indicated only vague opportunities for PPP in the province’s $30-billion, five-year infrastructure plan, touting a “made-in-Ontario solution” that stressed public ownership and control of all strategic infrastructure assets.

“At the national level I think Canada enjoys a tremendous opportunity in terms of its ability to invest in infrastructure,” said Chris Leslie, senior executive director, Macquarie North America Ltd., New York. “The investors are simply waiting for Canadian infrastructure to become available to them in the same way it has in the rest of the world.”

Leslie cited Canadian pension fund market investment in such overseas projects as Australia’s Sydney airport, and gas distribution networks in the UK. Leslie added that BC’s positive experience with PPP projects should encourage other private sector participants to step up to the investment plate.

Larry Blain, CEO of Partnerships BC. He says public trust is encouraged by making PPP deals transparent.

last update:Jun 2, 2006

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