On time and on budget.
That is the motivation for the provincial government’s preference behind the public-private partnership (P3) model that is currently building the Penticton Regional Hospital and the South Okanagan Correctional Facility in Oliver.
“You won’t find one of these projects that has gone over time or over budget. There is such a well-established record and we are world leaders,” said Minister of Finance Michael de Jong, who was in Penticton on Thursday touring the hospital with MLA Dan Ashton.
de Jong said B.C. is now the only province to hold a AAA-credit rating and are being looked at by countries like India and some U.S. states to learn more about the B.C. model so they can follow it.
“We have developed this expertise. There is a risk transfer that protects taxpayers and it works,” he said. “Time and time again the auditor general has confirmed we are getting value for the approach that we are taking and it is why so many other people want to emulate our approach.”
The Penticton patient care tower was also issued a green bond and is one of only two issuances to date for B.C. public-private partnership projects. The North Island Hospitals Project in 2014, in B.C., was the first green bond to fund such a partnership in North America. Green bonds are similar to traditional bonds, but the proceeds are used exclusively for projects with environmental benefits.
The previous procurement model saw government and taxpayers assume all the risk.
“The norm for these projects until we employed this model, time and time again, a year, two years, three years behind schedule and woefully over budget and the taxpayers were left holding the tab,” said de Jong.
The 32.2-year bond was issued by EllisDon Infrastructure and raised approximately $130-million toward construction of the Penticton patient care tower. Based on the EllisDon bid, the capital budget for the project is now $312.5 million. The Okanagan-Similkameen Regional Hospital District is providing $117 million, the South Okanagan Medical Foundation is contributing $20 million, Interior Health is providing $14.4 million and the provincial portion is $161.1 million.
de Jong said there are over 40 P3 projects in the province and it has become a very well-established model in B.C. He added the money being spent on these projects should be available to the public because they are public contracts.
“When public dollars are being expended it is my view, and the government’s view, that the public deserve to know how much is being spent. It is why two weeks ago we took the first step to proactively release contracts by posting them,” said de Jong, who added he was going to follow up on projects such as the correctional centre to see why it isn’t available now.
“I don’t accept the proposition that where public dollars are involved that the amounts can be hidden.”
The new patient care tower will be engineered to Leadership in Energy and Environmental Design Gold certification standards. de Jong said changes to parking are slated to begin early next week and then construction of the tower is expected to begin in August 2016.
“It is very exciting. I remember coming as the health minister in the early days and touring the old facility and it was another one of those hospitals built in the ‘50s. For its day it was state of the art and the area has outgrown it. The hospital is where it is at now, poised to begin construction, because of the innovation and the commitment of the folks here and Dan (Ashton’s) work,” said de Jong. “We have a finite amount of money and we are trying the commitment to get going and it was Dan that worked with the (hospital district) to sequence the funding.”