Survey supports P3 for hospital, other projects

Three years after Sault Area Hospital (SAH) opened the doors of its new facility on Great Northern Road, officials say financing of the hospital’s construction and ongoing maintenance has been a success.

The hospital was built under what is known as a public-private partnership, or P3.

In Ontario, a P3 is often referred to as an alternative financing and procurement (AFP) approach.

Health care services at SAH are administered and funded by the province, while a consortium known as Hospital Infrastructure Partners (HIP) that built the facility is responsible for the building’s maintenance over the next 30 years.

HIP consists of Carillion, EllisDon, Fengate Capital and LPF Infrastructure (the Labourers' Pension Fund of Central and Eastern Canada).

Critics of the P3 model, such as the Ontario Health Coalition, say private sector involvement in the building and maintaining of health care facilities such as SAH cuts corners on the quality of health care.

Proponents of the P3 model say it produces new health care facilities on time and on budget.

A recent nationwide survey conducted by Nanos Research for the Canadian Council for Public-Private Partnerships (CCPPP) shows 62 percent of respondents are open to the P3 model for various infrastructure projects, 63 percent in favour of going the P3 route for construction of hospitals.

The group also conducted a more in-depth survey gathering responses to specific P3 projects, such as Sault Ste. Marie’s SAH, a bridge project in Winnipeg and a water treatment facility in Moncton.

CCPPP says out of 300 respondents to the survey in Sault Ste. Marie in regards to SAH, 63 percent showed support for P3, 64 percent recognized P3 as a benefit to the taxpayer, and 70 percent agreed the new SAH may not have been built without the private sector in the design, construction, financing and maintenance of the facility.

Mark Romoff, president and CEO of the CCPPP, speaking to SooToday.com, said SAH “is definitely a success story.”

There are 207 infrastructure projects currently in procurement, under construction, or in operation across Canada through the P3 model.

79 of those projects are in the health care sector, Romoff said.

“The results of the survey in the Sault were very compelling.”

While comment from P3 critics from the Ontario Health Coalition was not available, Romoff dismissed their viewpoint that P3 opens the door to private sector involvement in the delivery of health care.

The view that P3 cuts staff and services to pay for facility maintenance “is not accurate,” Romoff said.

“I’m always disappointed with organizations that don’t have all the facts in front of them.”

“Public-private partnerships are simply a method of procurement, and with P3 the private sector always assumes the risk around design and construction…with traditionally procured projects they often come in way over budget and way behind schedule.”

“In the case of P3 there are penalties that apply should the private sector group not meet the deadline set, which is why our experience across Canada has seen 200 projects done on time and on budget, with significant government savings,” Romoff said.

Under P3, SAH opened March 6, 2011, a month ahead of schedule.

Romoff said the various levels of government can learn a lot from the P3 model, encouraging more P3 partnerships as the need for infrastructure renewal keeps growing as governments deal with financial challenges.

Ron Gagnon, president and CEO of SAH, said he was pleased SAH was given the spotlight as a P3 success story in the survey.

“It is gratifying, and I think in the case of Sault Area Hospital it’s very warranted as well.”

“I think our project, not just from a P3 perspective but from a new hospital perspective, is probably among the best in the province,” Gagnon said.

“We had a project management team that worked with the consortium on this project and they did a fabulous job, and I think the community is benefitting.”

Gagnon also dismissed critics claims that P3 cuts corners on the quality of health care.

“That shows a basic misunderstanding or lack of knowledge of the actual model and the agreement that comes with the model.”

“The agreements we have with the consortium are pretty prescriptive with regards to what type of work needs to be done if the facility isn’t in a certain state, or if a certain amount of rooms aren’t available, there are remedies for that.”

“We meet on a monthly basis with the consortium to review the operation of the facility,” Gagnon said.

“The consortium is accountable for the operation and maintenance of the building itself, they don’t have anything to do with nursing and the delivery of care.”

“I don’t think anybody who works here or who sits on our Board would want to be sacrificing the future of the hospital just for a pretty deal, and nobody did…this is an excellent deal for this community,” Gagnon said.