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The province is planning three new schools in Winnipeg and one in Brandon, and the private sector will be a partner, Premier Brian Pallister announced Tuesday.
The government will be issuing a request for proposals and will consider public-private partnerships for other major projects, such as health-care facilities, roads, bridges, and arts and sports facilities, he told a Canadian Council for Public Private Partnerships conference.
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What's a PPP?
A public private partnership differs significantly from the traditional government tendering for capital projects, and benefits both governments and the private sector, says Mark Romoff, president and CEO of the Canadian Council for Public Private Partnerships.
Under a P3, consortiums form which include every aspect of a major project, from architects doing the initial design, to the contractors building the project, to the companies which maintain a building such as a school or hospital for the next 30 or 40 years.
At the end of that contract, "It has to be handed back to the government in pristine shape. You have to put together a consortium the government has confidence in."
The price is set, and the consortium is responsible for any cost overruns or delays. The government doesn't pay a penny until the building is operational, so it saves several years of borrowing costs.
The company's maintenance costs are built into the bid, so government saves decades of upkeep on a school or a hospital, Romoff said.
And while there is no guarantee that a P3 will prove to be the best option for schools or other projects, that's the Progressive Conservative government's hope, he said in his keynote address. He said the province will soon repeal restrictions set by the former NDP government.
"You're trying to get better value for money," he told reporters later. "How can we stretch the dollars?"
Other provinces have successfully used P3s for hundreds of capital projects and it is how new schools are built in Saskatchewan, said Pallister.
The plan is to build a kindergarten-to-Grade 5 French immersion school in Seven Oaks, a nursery-to Grade 8 in Waterford Green in the northwest corner of Winnipeg School Division, a K-8 in south Brandon, and a grades 9-12 high school in Waverley West in Pembina Trails School Division.
The plan is for construction to begin on all four facilities in 2019 at a cost of more than $100 million. Each would include a daycare with spaces for 20 infants and 54 preschoolers.
Pallister said there isn't time to wait to look into a P3 for new schools in Winkler and Niverville, which Education Minister Ian Wishart has identified as the province's top priorities.
"We can't ignore the infrastructure deficit — it's real," said Pallister, who scoffed that the NDP used an ad hoc approach and forgot that it was spending other people's money.
Pallister said that P3 shares the risks and rewards, and also brings both public and private skills to a project.
"One thing it leaves out is, how many votes are in it for me?" he said in another backhanded swipe at the NDP. "Just because a project is shovel-ready doesn't mean it's shovel-worthy."
Full disclosure of the bidding process is necessary, NDP education critic Wab Kinew said.
"I'm not saying P3s are bad," he said. "The bottom line here is, Manitobans deserve to know if a P3 school is cheaper and better,"
The P3 private consortium that builds the facilities will be responsible for their maintenance for 30 or more years, but the premier said there will be no changes to school divisions being fully in charge of management or operations of the schools.
Other premiers have told him that P3 projects often come in ahead of schedule and under budget, thanks to the innovative methods used by the consortiums not possible when different companies are bidding on separate sections of capital projects, he said.
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He agreed that the government could consider a P3 for the now-postponed $300-million CancerCare Manitoba building, but would not speculate if other health projects — such as personal-care homes —would be large enough to justify a P3.
But Pallister also tried to cool down the enthusiasm of one delegate to the conference, who asked if P3 could be used to build community projects that use fundraising and matching provincial dollars, such as ongoing projects in Assiniboine Park or the Winnipeg Art Gallery.
P3s don't change how the government will spend scarce dollars, he said.
"We need to move away from a situation that says, if we raise $1 million, the government will give us $1 million."
The provincial government does not want to speculate even on ballpark costs of the four new schools, but does acknowledge they'll cost a total of more than $100 million.
One senior source in public education said that building costs could run around $350 a square foot --- higher for a high school with specialized shops, labs, and computer and band rooms and a larger gym than an elementary school.
Here are some details:
Kindergarten to Grade 5 French immersion, Seven Oaks School Division, south of Templeton Avenue and east of Pipeline Road, 450 students but could expand to accommodate 600 students, 56,662 square feet.
Nursery to Grade 8, dual track, Waterford Green in Winnipeg S.D., 600 students, expandable to 825 students, 76,036 square feet
K-8 English track, southeast Brandon, 450 students, expandable to 675, 60,684 square feet
Grades 9-12 English high school, Waverley West in Pembina Trails S.D., 1,000 students, expandable to 1,200, 125,087 square feet.
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Updated on Tuesday, May 2, 2017 at 11:29 AM CDT: Updated