24 Sep 2018
Extract from Business View Magazine article, Plenary Group North America: Bringing infrastructure to life, Lorie Steiner, September 2018.
Business View Magazine interviews Brian Budden, President & CEO of Plenary Group North America, for its series on developing infrastructure in North America.
In North America, Plenary is the largest dedicated long-term investor, developer, and operator of P3 projects in the health, transportation, education, defence, justice, and government accommodation sectors.
“Most of our projects have a design, build, finance, and maintenance scope for anywhere from 20 to 50 years”, says Budden. “We maintain and lifecycle our projects and invest our own money into them for that period of time. Typically, there is a performance-based contract that requires us to rectify any issues within a set timeframe to avoid penalties. This is at our risk and cost and we work closely with select subcontractors to assume and manage these obligations.”
The other type of P3 investor that has emerged is construction firms that look to invest into the equity of the projects they construct. While some of these groups will invest for the longer term, many plan to stay involved for a shorter period of time, selling their investment when the project reaches an operational state – something Plenary Group North America does not do. “We believe it is important to have full alignment with the infrastructure users throughout the whole project term,” says Budden, “which is why we believe in hands-on oversight. We’re focused on the long-term, and are staffed with 100 people to properly, actively manage these partnerships – we have never exited a project.”
On the future of development in North America, Budden adds, “Looking ahead, we certainly plan to stay at the forefront of delivering infrastructure in Canada, where it’s a more mature market. At the same time, we’re seeing a lot of growth opportunities in the U.S. and believe we’re particularly well positioned for these. Many American states and municipalities are doing this for the first time, and in many cases they are exploring slightly different models – that works well for us. We have no real tick-the-box institutional requirements and, where there is a committed and realistic project sponsor, we appreciate the opportunity to be dynamic and flexible.”
Budden notes, “In Canada, there were agencies set up to advise on P3 infrastructure solutions. Infrastructure Ontario and Partnerships BC, in particular, have done an excellent job of bringing a large number of P3 projects successfully to market. It would be great if similar agencies could evolve in the States but this is difficult because the U.S. is so diverse, geographically and politically. In the absence of dedicated agencies, what we really need is strong representation on the public side – a champion – who wants to advance the project; somebody with the ability to understand what is involved in a public-private partnership, and with an openness to sit down and work out exactly how it should best proceed. As more governments explore P3 delivery and as we see a growing number of successful P3 procurements, we expect the model will continue to gain traction in the U.S. and we’re excited to be part of that evolution.”
View the complete Business View Magazine article.
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