Bundling Projects – The Alberta Schools Experience Kees Cusveller Saskatchewan P3 Summit 2014 September 9, 2014

Typical P3 Arrangement Concession Agreement Subcontractors Gov’t Agency Private Contractor (SPV) Operate Maintain Lenders (Debt) Private Finance Sponsors (Equity) Investment Operating Availability Payments Capital Contribution Design Build Direct Lender Agreement

History Bird/GrahamASAP 118 schools Opened Sept 2010 Bird/GrahamASAP 210 schoolsOpened Sept 2012 Clark/TurnerASAP 312 schoolsOpened Sept 2014

Bird/Graham Joint Venture 50/50 integrated design build JV Joint and several JV banking, subcontracts, project office

Facts and Figures ASAP 1 18 schools 4 school boards 2 cities 3 core designs ASAP 2 10 schools 6 school boards Several municipalities Several designs

Facts and Figures (cont’d) ASAP modulars 12,000 students 900,000 total square feet 21 month design and construction schedule ASAP modulars 8,000 students 600,000 total square feet 24 month design and construction schedule

Bundling Advantages Economies of scale Prototype reduces errors Better planning Efficient work flows/approvals Strong teams

Bundling Disadvantages All or nothing procurement Subtrade risk management Can have 1 error repeated numerous times Reduces innovation Binary performance requirements

Bundling Opportunities Cost effective projects Life cycle inclusion is critical Improved commissioning process Cost/scope/time certainty

Bundling Challenges Managing multiple owners and user groups Ineffective risk transfer 4 th ‘P’ is politics Steep learning curve Single supplier constraints Outside parties need to be on side

Lessons Learned Need the right partners Political will to proceed Economies of scale versus risk management Importance of life cycle costing

Bundling Projects – The Alberta Schools Experience Questions??