Thank you, Mr. Chair, and thank you, guests, for coming in today.
The biggest impacts of a P3 approach have been mentioned a few times. The biggest is the built-in desire to minimize the total life-cycle costs over the life of a project or an initiative. It's built in not because of good will but because of a contract.
Second, there's a built-in desire to deliver projects on time and on budget. Again that's not good will; it's because of a contract. Many people have identified that there's a transaction cost up front, that contracting is a real challenge.
We had a couple of people from the Canadian Council for Public-Private Partnerships on Tuesday of this week talking about how in Canada we've developed some unique expertise and some best practices in contracting compared with those in the U.K., where very often it takes four years after the selection of a preferred bidder to actually finalize a contract. In Canada we're able to get it done generally, on average, in 18 months.
It's a good thing that we have this intelligence in Canada. Maybe there's something good in our water, but it might also be our legal system and our engineering and contractual expertise that enable us to do that.
I want to make another point of comparison. In the U.K., there was a Treasury report—and this is under the Labour government, by the way, so it's not necessarily a partisan issue—that mentioned that 20% of P3 projects had been delivered late or had run over budget, but that was compared with 70% of conventional public projects, so again the incentive in the P3 contract is really what helped drive the human behaviour to get these things done on time and on budget.
Finally, here is a little quotation, again showing that the P3 approach is not necessarily ideological in that it spans different types of governments. In my province, Ontario—Mike Wallace quoted this same report—Bob Chiarelli was saying:Having private sector firms pay for cost or budget overruns creates the correct incentives to ensure that projects are delivered on time and on budget. Research demonstrates that AFP projects—that's alternative financing and procurement— have delivered substantial savings to Ontario, British Columbia, Alberta and Quebec.
I want to pose my question to Mr. Atkinson. From the point of view of a builder, could you talk about this incentive to get the projects done on time and on budget and how it differs under a P3 environment from the case under a traditional design and procurement and construction project?