This is the first of two posts about the recent Infrastructure Ontario 2015 Track Record Report.
As the public-private partnership (P3) market in the United States continues to grow, U.S. agencies that are considering the use of P3s to deliver their infrastructure projects have often expressed a desire for more research related to this innovative delivery model. Last week, Infrastructure Ontario, the agency tasked with delivering the Province of Ontario’s largest and most complex infrastructure projects, released its 2015 Track Record Report.
For the past three years, Infrastructure Ontario has commissioned an independent, third‑party consultant to review and report on infrastructure projects delivered through the agency’s Alternative Financing and Procurement (AFP) program. AFP is the public-private partnership (P3) model frequently used in Ontario to deliver social infrastructure such as health care and justice facilities, as well as transit and transportation projects. The annual Track Record reports review AFP projects that reached substantial completion in the prior fiscal year and provide an objective analysis of their on-budget and on-time performance. But this year’s report added a new metric. In addition to AFP projects, this year’s report expanded the scope to include seven projects completed in the last two fiscal years under Infrastructure Ontario’s traditional Direct Delivery model. The inclusion of Direct Delivery projects in the report provides a unique opportunity to compare the performance of AFP projects to projects procured under the agency’s traditional model.
This year’s report, completed by cost consulting firm Hanscomb, found Infrastructure Ontario’s on-budget and on-time performance to exceed the generally accepted industry standards for AFP and Direct Delivery projects.
In the report, Hanscomb analyzed 45 AFP projects that reached substantial completion before March 31, 2015 and found that 44 of them were delivered on budget. A project is on budget if its final project cost (awarded contract amount plus utilized post contract contingency) is less than or equal to the awarded contract amount plus the budgeted post contract contingency set at financial close.
The 98% on-budget rate is consistent with the previous year’s reported 97% on-budget rate (36 out of 37 projects) and remains well above industry standard benchmarks.
For comparison, 71% of the projects (5 of 7 projects) procured using the Direct Delivery model during the past two years were found to have been delivered on budget.
The report also found that 73% of AFP projects (33 of 45 projects) were delivered on time or within one month of substantial completion, with eight of those projects having been delivered early. It was noted that for 12 of the 14 AFP projects that experienced schedule delays (more than five business days over schedule), the private sector retained full or shared responsibility for the delay.
As for Direct delivery procurements, 86% (6 of 7 projects) were delivered on time or within one month of substantial completion.
In addition to the cost and schedule analyses, the report also provided an interesting look at post contract contingency utilization, which will be discussed in a future blog post.
A full copy of the 2015 Track Record Report can be found here.
The second post on the Infrastructure Ontario 2015 Track Record Report can be found here.
Frank Liu helps public agencies use innovative procurement methods to deliver highly complex and large-scale airport, highway, bridge, tunnel, transit and social infrastructure projects.
His work spans every step of the ...
Nossaman LLP’s 30-plus infrastructure attorneys offer clients, colleagues, strategic partners, and industry media a wealth of practical experience, insider insight, and thoughtful analysis here on Infra Insight. We blog about what we know best, from industry-leading procurements to local and national policy developments that affect the market and our clients.