P3 model ‘a mess’ for education

Labour group doubts facilities will be built on time, if at all

A study undertaken for the Redford government indicates that Alberta’s plan to build 50 new schools is “a mess” and the schools won’t be built on time — if they are built at all, says the Alberta Federation of Labour.

Federation president Gil McGowan said a Deloitte review of the P3 procurement process, which the AFL obtained through freedom of information legislation, shows why companies don’t want to bid on public-private partnership projects that require them to finance, build and maintain schools for 32 years.

Deloitte’s examination of the latest P3 program’s failure to attract more than a single bid on a 19-school bundle found that slim margins, arobust construction market and shortages of skilled workers have chased many of the large construction companies away from the projects.

“It looks to us like they’re promising something they’re not going to be able to deliver and that they know they can’t deliver it, but aren’t being straight with Albertans about it,” McGowan said. Infrastructure Minister Ric McIver rejected the AFL premise and vowed the schools will be built on time.

In its report, Deloitte surveyed 14 companies, including the sole bidder Gracorp Capital Advisers and Graham Plenary Group, about the process and determined the size of the project realistically meant there were likely only two teams with the capacity to successfully complete a project of such size.

The companies said there would be more interest if the province shelved the P3 model and switched back to tendering smaller numbers of schools constructed under traditional design and build model. The report says the increasingly price competitive nature of the P3 model has resulted in diminishing returns that “simply do not provide enough incentives for proponents to bid.”