Iqaluit International Airport

Iqaluit International Airport

Location: Iqaluit, Nunavut

Status: In Operation

Value of Partnership: $418.9 million

Type of P3: DBFOM

Financial close: September 2013

Substantial completion: August 2017

Handback: 2047

The Iqaluit International Airport is the major gateway to Nunavut, a unique geographical area without roads connecting many of its communities. Air transportation is the critical year-round link for Iqaluit and Nunavut to the south, for provision of perishable food and emergency medical care. Sea access is seasonal and limited to a small number of sailings between July and October.

The project, which opened to passengers in December 2017, was the first time in North America that a P3 procurement model was used for an entire airport infrastructure project. The project was ambitious not only because of the old airport’s history as a U.S. air force base in the Second World War and its age, but also because of its location — the remote, Arctic environment and extreme winter conditions added to the complexities of the project and required innovation in all its aspects, particularly in design and construction scheduling.

The design of the terminal building’s rotunda, which is shaped like an igloo, as well as the artwork and sculpture on display, all reflect the imagery of Canada’s North.

Thermosyphon technology was used to prevent heat from reaching the permafrost that supports the airport’s building foundations. The terminal building was kept primarily single-level to minimize surfaces exposed to winter weather and to keep all public passenger-processing functions on the same level. Upgrades for passengers, such as washrooms past security, were given the same consideration as the complex construction of an international runway in the arctic.

A major feature of the project was the existing airport had to be kept fully operational during construction.

The Government of Nunavut worked with commercial and technical advisors to determine the best procurement approach for the project. A design-build-finance-operate-maintain (DBFOM) public-private partnership (P3) model was chosen as it would integrate all aspects of the project, provide optimum risk transfer, encourage innovation and complete construction more quickly than a traditional design-bid-build (DBB) procurement model.

The government selected Arctic Infrastructure Limited Partnership (AILP) to deliver the project through a 34-year-4-month performance-based agreement to design, build, finance, operate and maintain the airport. The project cost, $418.9 million NPV, provided $99.8 million NPV in savings to the government compared to a traditional DBB procurement. It was delivered on time and on budget.

As part of the agreement, AILP receives operations and maintenance payments, which are based on performance, facility availability, and service quality. Performance is constantly monitored, tracking the achievement of key performance indicators and availability of the infrastructure.

The government is entitled to make deductions from its monthly payments if AILP does not meet the standards specified in the project agreement. For example, if a runway is not available and the situation is not resolved within 15 minutes, the payment to AILP can be reduced by up to $4,500 for each 15-minute interval depending on the time of day.

READ MORE: CASE STUDY

Challenges

• Building a complicated, large-scale project under difficult northern climate conditions
• Building the necessary capacity in the local economy while complying with the Nunavut Land Claim Agreement (NLCA)

Innovations

• The private partner, Air Infrastructure Partners (AIP), had to operate and maintain the existing airport during construction of the new airport and for 30 years after construction is finished.
• The Government of Nunavut will own the airport during the entire period
• The Project Agreement had significant requirements for the involvement of the NLCA Beneficiaries requiring AIP to provide a diverse range of training opportunities to local Inuit community members

Results 

• The project includes a new airport terminal building, expanded aprons for planes to park, new lighting systems, an upgraded runway, and a new combined services building to house fire-fighting vehicles, support equipment and heavy equipment that maintains the runways
• The new terminal’s leading-edge design references the Arctic environment while reflecting the community’s values and culture
• The project resulted in improved convenience and safety, make operations more efficient and reliable, and make future airport expansions easier
• Benefits of the new Air Terminal Building’s design include:
  • Elimination of the need for buses shuttling passengers to and from airplanes
  • Multiple security stations to reduce wait times
  • Central concourse with a variety of spaces for displaying Inuit art
  • An Elders’ Lounge; anda rotunda that can be used for public gatherings and events
  • New foundation system to prevent cracks that are typically seen in the buildings in permafrost areas, and 
  • Access to refreshments and washrooms, post-security
• The project provides significant employment opportunities as well as training and development opportunities including the opportunity to earn academic credentials for NCLA Beneficiaries — who have to make up 20 per cent of the labour force increasing to 60 per cent of the labour force by the end of the Project Agreement, thereby adhering to conditions set out in the NCLA.
• The project facilitates improved accessibility to Nunavut, which will encourage private investment in the region
• A combined heat and power plant that burns fuel to create electricity and then uses the byproduct for heat will allow the airport to generate its own electricity efficiently.

Partners:

Public: Government of Nunavut

Private: Arctic Infrastructure Limited Partnership (InfraRed Capital Partners Limited; Bouygues Building Canada Inc.; Colas Canada Inc.; and Winnipeg Airports Authority Inc.)

Awards: National Awards for Innovation & Excellence in P3s' 2017 Gold Award for Infrastructure