Public-private Partnerships:

Public-private partnerships (P3s) in the water sector are used increasingly as a means for addressing infrastructure around the globe. In fact, government agencies have been created in the United Kingdom, Australia, across Europe and in Canada to support various forms of P3 implementation. Currently, Canada is seeing particularly strong growth in P3s. While P3s have been implemented in Canada for years, in 2009 the federal government created a the $1.25 billion P3 Canada Fund, which has contributed to increased use of P3s for infrastructure delivery. To date, the Canadian P3 model has been used for successful delivery of many health care, transportation, transit and building projects, and several water P3s are in the planning stage.

P3 Implementation in Canada

Public-private partnerships are business relationships between public and private entities that offer alternatives to traditional means of delivering service. The potential benefits of using P3s include: gaining access to private-sector capital and expertise; improving efficiency and life-cycle cost proformas; completing projects faster than with traditional models; and optimizing construction and performance risk-sharing. In the Canadian P3 model, funds for infrastructure projects are generally guaranteed by the government, making the risk-balance structure attractive to private companies and allowing the government to spread capital spending over a number of years. The private entity usually is not compensated until construction is complete; the onus of the construction performance is on the design-builder; and the private entity receives the balance of its payment from the government over a defined period during which the private company provides operations and maintenance for the project. With Canadian transportation projects, P3s have been implemented through the design, build, finance and maintain model, wherein the capital cost is paid out over a 10- to 20-year period. The Canadian P3 model is well established, is well funded, and has proven successes in transportation and healthcare infrastructure.