There is much available capital in Canada and elsewhere ready to fund infrastructure, particularly with respect to long-term capital. Indeed, CCPPP’s members would argue there is currently more money available than there are projects in which to invest.
In recent years, the number of projects requiring longer term capital has diminished considerably. The Council believes that leveraging private capital and expertise is not only a key component for successful projects but is an essential part of incentivizing the right behaviours and to achieve desired outcomes Having private capital-at-risk over the long term means the private partners stand to lose should they not deliver the project on-time, on-budget or not to the agreed upon standard.
As the federal government's 2021 engagement paper on the National Infrastructure Assessment notes “[i] infrastructure investors, particularly public pension funds, have expressed a clear desire to invest in Canadian infrastructure, but institutional investment depends on governments providing certainty and predictability with a long-term vision.”
CCPPP believes such investors need the opportunity to invest meaningful levels of private capital, with more design-build-finance-maintain (DBFM) projects or similar structures being utilized. The Council’s research consistently demonstrates private capital adds value to projects.
Why is this important?
If properly structured, the role of private capital can go beyond paying for capital works and can act as the glue that efficiently assesses, manages, mitigates and co-ordinates project risks, as well as adding discipline to the long-term life cycle costs of a major project.
CCPPP advocates, first and foremost, for P3s that leverage private capital and expertise, given its demonstrated effectiveness as a tool to achieve desired outcomes.