It's been our experience that projects that are larger—probably while the capital standard here is $50 million, it's probably $75 million or over—are complex. If it's a straightforward structure like an office building, it's probably not the best P3. But when there is opportunity to provide different designs that can improve the facility, such as in a hospital like the surgical centre, where the bidders looked at the adjacencies they could improve, lighting, access to natural light, a suite of things, those are the better projects.
With a highway, if you look at the Sea to Sky Highway, for example, when it was 100 kilometres long, there was an opportunity for better use of materials. When the winning proponent looked at the ministry's design, the ministry was only going to rehab about 13 of the bridges along the Sea to Sky Highway, and considering the life cycle cost, the proponent replaced all those bridges. That was all done within the ministry's original budget.
It's when you have an opportunity to really affect the design that those are the best projects.
We're doing a project in north Vancouver Island now, in Campbell River, the replacement of a large hydroelectric facility. There are many opportunities for where you can put the power house, and how you can run the water. All those things will be looked at through the lens of constructability, as well as long-term maintenance costs.
When it comes to risk transfer, in British Columbia we do a very detailed risk analysis, not only for the opportunity to try to quantify the kinds of risks, but also to mitigate the risks on the projects. I think people miss the fact that working on risk analysis provides the huge benefit of being able to identify the risks in the project and the mitigation strategies.
When it comes to evaluating risk, we look at each risk and attempt to quantify the province's exposure on a high, medium, and low basis as well as, on the other side, what a private sector proponent's exposure is to those risks. They can be significantly different just in how they are exposed to those risks. Then a Monte Carlo analysis is done and a range of outcomes is reviewed. We should all remember that a value-for-money analysis is an estimate of outcomes and not a pinpoint value.