Yes, if I may. Thank you.
There was a rather timely article in the Quebec press yesterday—I'm not sure if any of you had a chance to take a look at it—about some of the experiences that we are having on infrastructure projects. The statement was that we are seeing cost overruns in the order of 80% on some of our capital projects; it talked specifically about a road project that is under way currently, in conventional mode. Half of it has been built, we're already two times over the budget announced, and we have another 50% of the project to complete.
I wanted to talk a bit about this because I've had a chance to take a look at some of the testimony over the last few weeks. We've talked a lot about the risk transfer that comes with P3s. No one wants to be involved in a project that has two times, three times, or four times the cost overruns. It's not a question of incompetence; tt's a question of having the right drivers and the right controls in place to try to mitigate those risks.
One of the dynamics that P3 brings is that it imposes a rigour around the planning process. Regardless of why governments announce projects before they have the right costing, the right planning, P3 is a very effective means of focusing attention on defining the requirement. Here's what I mean by that. Because in a P3 we are going to be asking people like Fengate and their partners to provide firm, fixed price commitments on projects, we need to be very clear about what we need. We need to think about how we are going to use the asset, what type of asset we need, and who will be using the asset, and we need to think about these things over a 30-year period.
This means that before we go into the market we must have done all that planning. One of the most powerful mitigators in controlling risks of cost overruns and delays is the discipline it imposes on planning. Now, one could argue that one could impose this type of rigour without doing a P3, but a P3, it turns out, is a very effective way of doing it.
I'd like to also take two minutes to talk a little bit about life cycle. I know that it has been addressed by other witnesses to the committee. Clearly, P3s bring with them a 30-year commitment in terms of maintenance and life cycle, but the other part of the dynamic is that, as we are witnessing...you have seen the infrastructure deficit estimates for the municipalities. That's true for all public infrastructure. It is one of things that we have not done very well: committing dollars to maintenance and life cycle for public assets. The reason is, dollars are limited.
These are the problems you're facing today. When we're faced with a decision today on where we spend those dollars, it's a lot easier to divert away from maintenance and deal with today's pressing problems. It's completely understandable. The reality, though, is that it comes with a cost, and a very significant cost, because what we are seeing is that it's not just a question of putting in a few extra dollars to catch up: we're having to completely rebuild assets that should have lasted another 20, 30, or 40 years.
So on the one hand, we get the advantage of pay for performance. Your private sector sponsors, your private partners, make a commitment to maintain adequately, to the standards you set as the public sector, and if they don't do that, there are financial consequences. The flip side of it is that, as the public sector, you are contractually committed to putting in the right number of dollars for maintenance and life cycle so that at the end of 30 years you're not rebuilding the assets. You are getting them back to you in a condition that is acceptable.
I know that my time is up, but I will say those are the two most compelling arguments. It means, though, that you need to be prepared to do P3s because there is this level of thinking, planning, and reflecting on the use of the asset and how it will be used over 30 years. It means that this will bring change within the federal public service. People will have to think about their roles as asset managers and developers in a different way.
Thank you very much.