Pitfalls for professionals in public-private partnerships
Becoming "partners" in business ventures with government can bring unwelcome, untenable risks.
by Brian Watkinson, Canadian Architect
The Relatively Recent and Hotly Debated Procurement Model of Public-Private Partnerships Brings Both Opportunities and Risks
Governments at all levels in Canada are using public-private partnerships (P3) to procure and deliver public buildings. On the face of it, this major investment translates into opportunities for our profession. However, architects need to understand that P3s result in startlingly different business and working relationships which bring with them new roles, responsibilities, challenges and risks.
Why are Governments Using P3s?
When first venturing into P3s, governments cited our massive "infrastructure deficit" in Canada — now estimated at well over $130 billion — the reason for seeking innovative financing schemes from the private sector, claiming that they couldn't afford to address the issue alone. P3 proponents went on to proclaim that public buildings can benefit from the efficiencies resulting from the private sector's ability to work smarter, faster and cheaper than the public sector. Today, it is "risk sharing" that is most frequently offered as the reason for using P3s. Public owners maintain that under traditional project delivery models, they are unfairly saddled with responsibility for risky cost overruns, delays, and substandard quality in design and construction.
As a result of this economic and political climate, governments are creating complex P3 contracts that transfer these kinds of risks — and more — to private-sector "partners" with the expectation that they are better positioned to manage those risks, often by transferring as many of these risks as they can on to other partners, including architects. With P3s, it is this transfer of risk that leads to some of the greatest challenges for our profession. . .
Brian Watkinson is an industry professional who has been researching P3s and studying their implementation since they were first introduced to Canada.
Links and sources
P3 For You and Me?, by Brian Watkinson, Canadian Architect, April 2008 edition
Posted: May 28, 2008
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