Alberta schools P3 project in trouble with only one bidder
The Government of Alberta may face problems to deliver 19 schools under a public private partnership. When the government recently asked for submissions to design, build, finance and maintain the facilities, only one consortium - Calgary's Gracorp Capital and Graham Construction - said it was interested.
Infrastructure Alberta spokesman Tracey Larsen said in an interview:
"There's a limited number of contractors and they're already busy with private sector and other government work. We're looking now at the options we have and we're still hoping to have those schools open by 2016."
The new P3 proposal is part of Alberta's government pledge in the last election to spend $2.4 billion to build 50 schools and modernize another 70.
Ten other schools were slated to be announced and built under public private partnerships starting next year.
The province's plan had been to choose three P3 proponents to submit a price this fall, choose a successful bidder by next summer and start construction shortly after that.
Industry experts said they have suggested the province consider conventional tendering and debt financing for the schools or dividing the P3s into smaller groups to attract more bidders. The option of continuing with only one bidder is very problematic because Alberta may not get a competitive price.
According to local sources, Clark Builders president Paul Verhesen said his firm, which is currently part of the consortium building a dozen P3 schools that are slated for completion next fall, didn't submit a proposal this time because it just doesn't have the additional capacity to take on another 19 facilities.
Steve Skelton, president of HOCHTIEF PPP Solutions North America Inc. that is the lead partner on the current P3 Alberta schools project, said he warned provincial officials their new proposal might not attract much interest:
"We had some chats and told them we thought there would be some challenges. With the industry being so buoyant, building schools on a low margin is not high on a contractor's list."
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