Parkland Institute's LRT Report

Is a P3 the best way to expand
Edmontons LRT?
A FEF0FT F0F ThE FAFKLAN lNSTlTuTE Y J0hN L0XLEY 0CT0EF 2013
WRONG TURN:
Wrong Turn: Is a P3 the best way to expand Edmontons LRT?
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Contents
Wrong Turn: Is a P3 the best way
to expand Edmontons LRT?
John Loxley
This report was published by the Parkland Institute
0ctober 2013 All rights reserved.
To obtain additional copies of this report or
rights to copy it, please contact.
Parkland Institute
university of Alberta
11015 Saskatchewan rive
Eduonton, Alberta T0 2E1
Fhone. (780)192-8558
Fax. (780) 192-8738
http.//parklandinstitute.ca
Euail. parkland@ualberta.ca
lSN 978-1-891919-12-2
Acknowledgeuents
About the author
About Parkland Institute
Abbreviations
Executive suuuary
Introduction
Public-private partnerships (P3s)
Assessment of the proposed P3 approach to the Southeast Line
1. Transparency, accountability, and access to inforuation
2. New technologies and systeu coordination do not require F3s
3. The public sector couparator and value for uoney couparisons
with other P3s
1. The value for uoney couparisons with other LFT projects
5. Frivate operation of the Southeast Line provides uuch of the
supposed value for uoney. how7
. Aspects of the risk transfer in the value for uoney calculation
are dicult to believe
7. The additional nancing costs of the F3 are huge
8. Frovisions to enable the public to share in gains related to
renancing or equity ipping are lacking
9. The wisdou of 30 year contracts
10. Fublic opinion and the LFT F3
Conclusions and Recommendations
Appendix 1. City of Eduonton policy on public-private partnerships
Appendix 2. Feviewing the docuuents. secondary screening,
business case, outline business cases, and addenduus
Figures
Figure 1. Eduontons LFT systeu and proposed extensions
Figure 2. F3 project process lifecycle and approval
Figure 3. Froposed organitation of the Eduonton LFT F3
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Far kl and l nst i t ut e 0ctober 2013
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Parkland Institute is an Alberta research network that examines public
policy issues. Based in the Faculty of Arts at the University of Alberta, it
includes members from most of Albertas academic institutions as well as
other organizations involved in public policy research. Parkland Institute was
founded in 1996 and its mandate is to:
conouct research on economic, social, cultural, ano political issues lacing
Albertans and Canadians.
publish research ano provioe inlormeo comment on current policy issues
to the media and the public.
sponsor conlerences ano public lorums on issues lacing Albertans.
bring together acaoemic ano non-acaoemic communities.
All Parkland Institute reports are academically peer reviewed to ensure the
integrity and accuracy of the research.
For more information, visit www.parklandinstitute.ca
About the Parkland Institute
About the author
John Loxley is Professor of Economics at the University of Manitoba and
a Fellow of the Royal Society of Canada. He has studied and published
extensively on public-private partnerships since the mio-1990s, ano is the
author, with his son Salim, of Pooli. Sr.i. Pri.ot Prft: T/ Pliti.ol E.oo,
f Pooli.-Pri.ot S.tr Portor/i ,Winnipeg: Iernwooo Fublishing, 2010,.
Acknowledgements
The author gratefully acknowledges the useful suggestions of two
anonymous reviewers, and the suggestions and editorial input of Shannon
Stunden Bower, Research Director, Parkland Institute.
Parkland Institute would like to thank Nicole Smith and Flavio Rojas for
their contributions to this project.
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Abbreviations
DB: oesign-builo
DBB: oesign-bio-builo
DBI: oesign-builo-nnance
DBIOMO: oesign-builo-nnance-operate-maintain-own
DBIOM: oesign-builo-nnance-operate-maintain
DBVIOM: oesign-builo-vehicle-nnance-operate-maintain
LRT: Light Rail Transit
NAIT: Northern Alberta Institute of Technology
PSC: public sector comparator
F3 or FFF: public-private partnership
PwC: PricewaterhouseCoopers
SPV: special purpose vehicle
VfM: value for money
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1
Executive summary
Edmontons transportation master plan lays out some ambitious goals for
the city. It signals the need to encourage downtown development, better
integrate the citys suburbs, reduce car use and congestion, and raise the
economic elnciency ol the City`s transportation. A key way the City ol
Edmonton plans to meet these goals is by expanding its Light Rail Transit
(LRT) system from one line to six in order to encompass more of the city.
Four of the proposed lines are considered extensions of the existing system,
which has been taken to mean that the City itsell shoulo manage nnancing,
operations, and maintenance. The expansion also consists of two new lines,
and some have argued that these are suitable for a public-private partnership
(P3) approach.
The City ol Eomonton retaineo the consulting nrm
FricewaterhouseCoopers ,FwC, to investigate the suitability ol the F3
approach to the LRT extension. This report examines, insofar as possible,
the oata ano analysis unoerlying three key reports prepareo by FwC. Some
ol these reports locus specincally on the Southeast leg ol the proposeo Valley
Line extension ,olten relerreo to as the Southeast Line,, which is slateo to
soon move ahead. Notably, none of the reports have been made public in
their entirety. The most important document, the business case, was accessed
in severely reoacteo lorm through Alberta`s Ireeoom ol Inlormation ano
Protection of Privacy legislation. Indeed, the business case was so severely
censoreo as to make it impossible to juoge oennitively whether the case
for the P3 approach is valid. The secrecy surrounding the P3 proposal is
troubling, unwarranteo, ano a breach ol the City`s own policy.
Unlortunately, signincant concerns are raiseo even by what little oata is
publicly available. Problems include the following:
Contrary to how some F3 aovocates have sought to portray the matter,
use ol new technologies neither necessitates nor justines a F3. Inoeeo,
a P3 approach has the potential to introduce problems of system
cooroination, ano ooes not allow the City to builo up the management
capacity that will be needed in-house for further LRT expansions.
FwC oemonstrates the superiority ol the F3 approach in part through
comparisons to the value lor money achieveo in other Canaoian F3s.
Because of differences in how value for money is calculated, these
comparisons cannot be accepted at face value.
2
Froponents ol a F3 approach have ioentineo some BC projects as
examples of what might be achieved here in Edmonton. However, a
closer look at these projects make clear that they are not arrangements
to emulate, given that they involve sacrinces in the quality ol the
infrastructure, and that their purported advantages may be nothing
more than imaginary.
What value lor money the Southeast Line F3 is expecteo to achieve is
largely louno in operations, likely through the intenoeo use ol labour
practices that threaten the well-being ol workers.
The methooology useo by FwC to justily risk spreaoing to the private
sector is open to criticism. Particularly, the assumption of large amounts
ol risk transler shoulo be examineo with scepticism.
A F3 arrangement woulo involve private nnancing, which is signincantly
more expensive than public borrowing. The use ol private nnancing
may cost the City ol Eomonton S!21 to S10 million ,or S227 to S27
million in todays money) more than if it borrowed the money directly.
The present proposal is lor the private sector to retain all pronts lrom
any luture rennancing or equity nipping relateo to the LRT F3 project,
positioning the private sector to achieve big gains while the City ol
Eomonton receives no benent.
The 30-year contract inherent to the proposeo F3 arrangement raises
important issues relateo to loss ol nexibility lor the City with respect to
nnance ano operations.
Notably, the public ooes not lavour taking a F3 approach to expanoing the
LRT, largely oue to concerns over lack ol transparency, cost escalation,
system integration, ano loss ol public accountability ano service quality.
Alter a thorough assessment ol the available inlormation, it is clear that
there is ample reason to question whether proceeoing to unoertake the
Southeast Line unoer a F3 arrangement will serve the public interest. The
City ol Eomonton shoulo reconsioer this approach.
3
RECOMMENDATIONS
1. Baseo on available inlormation, the City shoulo not proceeo with the F3
option, but shoulo insteao builo the Southeast Line on the traoitional
Design-Bid-Build or a Design-Build basis.
2. Il the City insists on consioering the F3 option, it shoulo open up all
documents and calculations employed so far in the evaluation of this
option, so that they can be publicly scrutinized.
3. The City ano FwC shoulo clearly justily ano explain the assumptions
that have gone into the assessments that have found in favour of a
P3 approach, and be prepared to discuss these assumptions in public
meetings.
4. Greater caution shoulo be exerciseo in making comparisons between
the value lor money purporteoly achieveo through other F3 projects
ano that expecteo lrom the Southeast Line. Comparisons shoulo be
made only when the public sector comparators employed in the various
projects are truly comparable.
5. Eomonton City Council shoulo take seriously the expresseo concerns
ol the public about proceeoing with the Southeast Line through a F3
approach.
4
Introduction
Edmontons transportation master plan provided for the expansion of the
City`s Light Rail Transit ,LRT, network lrom one line to six.
1
Iigure 1
shows the existing line that operates lrom Clareview station in the northeast,
passing through downtown to the University and then continuing to the
Century Fark station. It also shows proposeo new lines that woulo cover all
sectors ol the city, aooing lines to the Northwest ,Northern Alberta Institute
ol Technology to St Albert,, Northeast ,Clareview to Inoustrial Heartlano,,
East ,Downtown to Sherwooo Fark,, Southeast ,Downtown to Mill Wooos,,
South ,Century Fark to Heritage Valley,, West ,Downtown to Lewis Estates,,
ano the Central Area Circulation System. The intent ol the plan is to
encourage downtown development, better integrate the citys suburbs,
reouce car use ano congestion, ano raise the economic elnciency ol the
City`s transportation. The total cost ol these LRT network expansions was
estimateo to be in excess ol S3.o billion.
2

1 City of Edmonton, The Way We Move:
Transportation Master Plan (Edmonton:
September, 2009).
2 City of Edmonton, Fast Tracking LRT
Construction (NAIT, Southeast and West)
(Transportation Department: April 15, 2010), 2.
5
Figure 1. Edmontons LRT system and proposed extensions
Figure 1: City of Edmonton, The Way We Move: Transportation Master Plan (Edmonton: September 2009), p. 45.
6
In a preliminary screening ol the expansion projects in October 2009, the
City Aoministration oetermineo that projects involving the extension ol
existing LRT lines should be proceeded with in the conventional manner,
i.e. by public nnancing ano public operations ano maintenance, to avoio
problems ol integration with existing systems. Thus the Northern projects,
the South project, ano the Central Area Circulation System were oeemeo
to be suitable only for conventional procurement and organization. This
means that the projects will be built using a oesign-bio-builo approach in
which the oesign, nnancing, ownership, operations, ano maintenance ol the
project remain with the public sector, while the private sector bios to builo
the project. However, the Southeast to West Line, calleo the Valley Line, is
completely new and was thus deemed appropriate for alternate delivery
methods, usually a euphemism for public-private partnerships.
In December 2009, the City Council approveo the corrioors lor the
Southeast to West Line, along with a oowntown link, a total ol 27 kilometers
ol rail. In Iebruary 2010, City Council oetermineo that the Southeast to
West Line be given construction priority, with the NAIT concurrent to or
following.
3
In May 2010, the city laio the grounowork lor oepartures lrom
conventional procurement ano management ol City projects with the
oevelopment ol a policy on F3s. In July 2010, FricewaterhouseCoopers
,FwC, was appointeo by the City as Iinancial Aovisors to the Southeast
to West Line project. Since that time, they have completeo a number ol
assessments ol how best to proceeo with the project, all ol which concluoeo
in lavour ol the City pursuing a F3 lormat.
While there have been challenges to the planneo expansion ol the LRT
system, both conceptually ano in relerence to specinc routes chosen,
assessing the validity of these challenges falls outside the scope of this
document. This review is intended to determine if, based on the available
data, the decision to proceed with the LRT expansion as a P3 is sound.
It is now lour years since the ioea ol unoertaking an LRT system expansion
through a F3 arrangement was nrst mooteo publicly in October 2009. As
of yet, no concrete progress has been made in implementing the idea. In
the meantime, costs have escalateo, making nnancing more challenging. In
2009, the Southeast leg ol the project was estimateo to cost between S0.9
ano 1.2 billion.
4
Subsequently, it was saio to cost S1.1 billion.
5
A little later,
costs escalateo to S1.3 billion.
6
The cost is now estimateo to be S1.8 billion
ano is likely to escalate by between o0 ano 80 million oollars a year il the
project is oelayeo lurther. The Southeast Line is currently short S1 million
in lunoing. Uncertainties regaroing nnancing threaten to oelay the project
further.
7
3 Ibid.
4 City of Edmonton, Alternative Delivery
Methods for Future LRT Extensions (Capital
Construction Department: October 27, 2009),
Attachment, 5, 15.
5 Ibid., Attachment, 3.
6 City of Edmonton, Fast Track LRT
(PowerPoint presentation, Transportation
and Public Works Committee: May 4, 2010), 4.
7 Gordon Kent, Edmonton Council Votes
to Keep Seeking Southeast LRT Grants,
Edmonton Journal, June 19, 2013.
7
Data availability was a major impeoiment to this stuoy. None ol the reports
prepareo by FwC have been maoe public in their entirety. The most
important document, the business case, was accessed in severely redacted
lorm through Alberta`s Ireeoom ol Inlormation ano Frotection ol Frivacy
legislation. Inoeeo, the business case was so severely censoreo as to make
it impossible to juoge oennitively whether the case lor the F3 approach is
valio. Detaileo analyses ol the City ol Eomonton`s policy on F3s ano ol the
oocuments prepareo by FwC about the Southeast Line are available in the
appendices to this report.
Public-private
partnerships (P3s)
P3s are multi-year, often multi-decade, contracts in which a corporation or
consortium of corporations assumes responsibility for activities previously
unoertaken by the public sector. In the conventional approach to builoing
infrastructure, the public sector commissions an architect to design the
structure, and one or more private contractors to build it, while retaining the
lunctions ol nnance, operations, maintenance, ano ownership. This is calleo
a design-bid-build approach, or DBB. In a P3, the private sector may design
ano builo the project, while also taking on such responsibilities as oirect
nnancing ol inlrastructure, as well as management, operation, maintenance
ano, though not common in Canaoa, even ownership ol lacilities. At one
extreme, the F3 may take the lorm ol the private sector simply operating
or servicing a facility, such as a water or waste water facility (e.g. as in the
case ol the Hamilton-Wentworth waste water lacility, which also covereo
maintenance).
8
At the other extreme, the F3 may take the lorm ol a oesign-
builo-nnance-operate-maintain-ano-own ,DBIOMO, lor a perioo ol years,
as in the case ol the Charleswooo Brioge in Winnipeg.
9

Increasingly, F3s in Canaoa are taking the lorm ol oesign-builo-nnance-
operate-ano-maintain ,DBIOM,, while lormal ownership rests with the
public sector. In such projects, the public sector agrees to annual lease`
payments to cover the private sectors cost of capital. These are a substitute
for the public sector repaying its own direct borrowing and are, in effect, a
new lorm ol oebt. As Larry Blain, lormer CEO ol Fartnerships BC, has
put it so succinctly, Clearly all the money is coming lrom the government.
Its debt of the province, whether you borrow it as bonds, or contract over
a 3-year perioo.
10
The public sector also covers the private partners
operating costs, which may sometimes be folded into the lease payments, and
maintenance costs.
8 John Loxley with Salim Loxley, Public Service
Private Profits: The Political Economy
of Public-Private Sector Partnerships
(Winnipeg: Fernwood Publishing, 2010), 161-
170.
9 Ibid., 112-119.
10 Rich Saskal, Trends In The Region: Its
Quality, Not Quantity: Eying the Big Picture of
Californias Big Debt, Bond Buyer, October 5,
2007, 1.
8
The attraction of P3s for the private sector is straightforward. They provide
relatively new opportunities lor long-run ano guaranteeo pront. Since
private nnancing is generally more expensive than public nnancing, ano
since the legal and other transactions costs of P3s are much higher than
under the traditional approach, the P3 approach must offer other forms of
savings to the public sector. The claim is that in a P3, various potentially
costly risks that the public sector woulo otherwise lace are shilteo over to
the private sector. Depenoing on the nature ol the project, these risks are
olten greatest in the construction phase, where cost overruns ano project
oelays may be encountereo. Other potential risks that may be translerreo
include those related to demand or customer use, which can be important in
transportation projects. There may also be risks encountereo in operations
and maintenance. Proponents of P3s also argue that by involving the private
sector in the oirect nnancing ol the project, it has skin in the game` ano an
incentive to ensure the least cost oelivery ol projects over their lile-cycle,
alter taking risk into account.
For these reasons, proponents maintain that P3 delivery may be superior
in terms ol lile-cycle net costs ano benents. Ellorts to establish whether F3
oelivery is appropriate typically take the lorm ol a value-lor-money ,VlM,
analysis in which the proposed P3 (represented by a so-called shadow
bio, which renects bios that are likely to be submitteo when the project is
put to tender) is compared with traditional delivery through the use of a
Fublic Sector Comparator ,FSC,. The FSC shows the costs ano benents ol
proceeoing with the project in a conventional manner. Estimates are maoe
ol the lile-time costs ano benents ol the FSC ano the F3. These costs ano
benents are then translateo into tooay`s money ,present value, by oiscounting
them for each approach by an interest rate, based on the argument that
future sums are worth less than sums today because time is money. The
higher the rate ano the longer into the luture is the cost or benent receiveo,
the lower will be the cost or benent in present value terms. The same interest
or discount rate is applied to both approaches. The approach with the lower
value ol net costs at the given oiscount rate is saio to oller VlM relative to
the other approach. When a F3 approach is oeemeo to be superior, VlM is
usually expressed in dollar terms or as a percent of the discounted net costs
ol the FSC. The higher the oollar value ol the VlM, ano the higher it is as
a percent ol the net present value ol costs ol the FSC, the more VlM the F3
approach is said to offer.
The goal ol VlM analysis is to inoicate, at the planning stage ol a project,
the approach most likely to oeliver the requireo inlrastructure at the lowest
cost. As the project moves lrom planning to implementation, the anticipateo
VlM may or may not be realizeo, oepenoing upon the reasonableness ano
accuracy of the assumptions on which the analysis rests.
9
While assessing VlM may appear straightlorwaro, in reality it is not so.
11

The details of calculations, and the reasonableness and consistency of
assumptions, proouce wioe margins ol error, leaving signincant room lor
oebate. Some experts even question whether or not the major benents ol
P3 could be obtained by the public sector offering a single design-build (DB)
contract at a nxeo price while retaining all other lunctions in-house.
12
DB
puts contractors in control ol projects, giving them the latituoe to oesign
projects as they builo, in oroer to nno ways ol working within buoget
constraints. While popular with contractors ano governments, architects ano
engineers leel that DB oebases their skills, suboroinates them to pront oriven
contractors, ano potentially sacrinces the quality ol the nnisheo proouct.
Some authors, like Loxley ano Loxley ,2010,, treat DB arrangements
as a form of P3.
13
Others oo not. As we shall see, some recent F3 VlM
appraisals seem to have implicitly accepted DB arrangements as alternatives
to F3s by assuming DB, rather than DBB, in the FSC.
There have been a number ol acaoemic stuoies on F3 perlormance. Some,
such as Iacobacci ,2010,, have unoerwritten the arguments in lavour ol their
use, while others have been more critical.
14
The major criticisms ol F3s are
that olten VlM analyses, il perlormeo at all, are inaoequate. The problems
with these analyses are numerous, and include situations where:
the FSC ,representing a conventional approach, ano the shaoow bio
(representing a P3 approach) that are compared are often not driven by
the same specincations,
the choice ol oiscount rate is olten arbitrary ano sometimes quite high
,as in BC,, which lavours F3s, since the lease costs are long-term,
the assumptions about risk transler are olten excessive ,as high as
!9 lor simpler DBI mooels ano, astonishingly, in excess ol 70 lor
DBIOM projects
15
, ano lack justincation,
the VlM analysis is perlormeo only alter the F3 has been initiateo, which
woulo suggest such analyses are intenoeo to justily oecisions alreaoy
maoe, rather than to guioe oecision-making.
As a result ol such naws, the VlM process is olten heavily weighteo in lavour
of P3s.
11 Columbia Institute, Public-Private
Partnerships: Understanding the Challenges:
A Resource Guide (Vancouver, BC, 2007).
12 John Loxley, Public-Private Partnerships
after the Global Financial Crisis: Ideology
Trumping Economic Reality, Studies in
Political Economy 89 (2012).
13 Loxley with Loxley, Public Service Private
Profits.
14 Authors in favour of P3s include: Mario
Iacobacci, Dispelling the Myths: A Pan-
Canadian Assessment of Public-Private
Partnerships for Infrastructural Investments
(Conference Board of Canada, 2010), http://
www.conferenceboard.ca/documents.
aspx?did=3431. Authors who are more
sceptical include: Aidan R. Vining and
Anthony E. Boardman, Public-Private
Partnerships in Canada: Theory and
Evidence, Canadian Public Administration
51, 1 (2008): 9-44; John Loxley with Salim
Loxley, Public Service Private Profits:
The Political Economy of Public-Private
Sector Partnerships (Winnipeg: Fernwood
Publishing, 2010).
15 Matti Siemiatycki and Naeem Farooqi,
Value for Money and Risk in Public Private
Partnerships, Journal of the American
Planning Association, 78, 3 (2012): 286-299.
10
Other criticisms ol the F3 approach incluoe concerns that:
the number ol bios receiveo is olten quite low, making it unlikely that
competition will ensure low costs,
the large scale ol F3s oiscriminate against local contractors,
any purporteo elnciencies olten come at the expense ol labour in lower
wages, lewer benents, ano less security,
contract perioos are too large lor elncient monitoring ano control ol
private partners, especially by school boaros ano municipalities,
F3s builo long-term nnancial innexibility into public services, ano
are generally more costly over the project lile-time than traoitionally
oelivereo projects.
It shoulo also be noteo that oilnculties in accessing key oata relateo to the F3
arrangement are lar lrom unique to the Eomonton LRT case. Inoeeo, F3s
are associated with reduced accountability and transparency in the public
sector, because they are often shrouded in the secrecy purportedly necessary
to ensure commercial connoentiality.
16

There is a very strong F3 lobby in Canaoa supporteo by the Canaoian
Council on F3s. It is supporteo by all major construction, nnance, ano
consulting nrms ,incluoing FwC,, as well as a number ol provincial ano
municipal governments. This lobby serves as a strident and persistent
advocate for P3s. The federal government also has a strong bias in favour of
F3s. In 2009, it establisheo a S1.3 billion luno oevoteo entirely to lunoing
F3s, ano rennanceo it in 2013. More importantly, the leoeral government
requires all large inlrastructure projects to be evaluateo to oetermine il they
are suitable lor F3 approaches belore they are eligible lor nnancing through
regular inlrastructure lunoing outlets such as the Builoing Canaoa Iuno.
17

Increasingly, therelore, il municipalities ano others wish to take aovantage ol
leoeral inlrastructure money, they are pressureo to take the F3 approach.
F3s have become quite common since the 1990s. Accurate oata are very
haro to come by, but between 198 ano 2011, 200 F3s were planneo or
implementeo in Canaoa, incluoing 137 that were nnalizeo, at a cost ol
USS71.o billion. Alter a setback relateo to the 2008-09 nnancial crisis, the
pace at which P3s are coming on-stream seems once again to be increasing.
18

16 John Loxley, Asking the Right Questions: A
Guide for Municipalities Considering P3s,
Report Prepared for Canadian Union of Public
Employees, June 2012, cupe.ca/p3guide.
17 Loxley, Public-Private Partnerships after the
Global Financial Crisis.
18 Loxley, Asking the Right Questions.
11
Assessment of the proposed P3
approach to the Southeast Line
Given the secrecy surrounoing the oecision to unoertake the Southeast leg
ol the Valley Line LRT extension as a F3, it is haro to oller a thorough
evaluation. What lollows oraws on what little inlormation has been maoe
available, as well as the wioer acaoemic ano expert literature on F3s. At
the very least, this analysis raises questions that must be lully aooresseo il
the public is to have connoence in Eomonton City Council`s proposal to go
forward with the P3.
1. TRANSPARENCY, ACCOUNTABILITY, AND
ACCESS TO INFORMATION
The City`s approach to transparency, accountability, ano access to
inlormation was maoe quite evioent in a December 2010 inlormation
session lor City Council on the oelivery methoo lor the combineo Southeast
to West LRT Line.
19
Delivereo by then Manager ol Froject Management
8 Maintenance Services Joe Kabarchuk, the guioelines lor the session
containeo some remarkable restrictions on Council members` autonomy ano
democratic rights:
No recoro or minutes ol the inlormation session will be kept
The now ol inlormation must be entirely one way lrom Aoministration
to Councillors
Councillors can only ask clarincation questions
Councillors must not ask questions regaroing justincation lor inlormation
provioeo or actions taken by the aoministration
Councillors must not provioe comments, oirection or instructions to
Aoministration
Councillors must not oiscuss or oebate the inlormation provioeo by
Aoministration among each other
Councillors must not attempt to reach any oecision on the basis ol
inlormation provioeo by Aoministration
Though the intent was that the meeting not be construeo as a Council
meeting, most of these restrictions constitute a serious breach of the
oemocratic lreeoom ano responsibility ol Council members. The
alternative of not agreeing to them, of course, was denial of all access
to the information available. This management edict stood in complete
contraoiction to the City`s F3 policy, which requires that the Fublic interest
19 City of Edmonton, SE and W LRT Delivery
Method: Business Case Results, December 9,
2010.
12
must be thoroughly examined and discussed, that policy reviews and
oversight should be carried out to ensure transparency, due diligence and
the protection of the public interest, and that P3 processes and outcomes
will be transparent.
20

Since that time, it is apparent that information on the project has been
severely restricted, well beyond even the information restrictions that
characterize P3s elsewhere in Canada. Clearly, the City has chosen to put
its policy ol protecting commercial connoentiality above any concern lor
openness and transparency. Crucial decisions, such as that to proceed with
the P3 and, subsequently on August 29, 2012, to reverse Councils decision
to keep operations and maintenance in-house, were taken at short notice
and in-camera.
21

The almost complete redaction of numbers in the Business Case and related
papers also contradicts yet another component of the Citys P3 policy, which
states that The community will be well informed about the obligations of
the City and the private sector.
22
It should be noted that outline business
cases and the argument for proceeding with the corresponding projects
as P3s have been made available for projects undertaken in cities such as
Winnipeg and Victoria well before the call for proposals. These have given
numerical estimates of the net costs of the PSC as well as of the shadow
bid of the P3. They have also put numbers on different types of risk, and
the estimated allocation between the City and the private partner. See the
example of the 2008 report by Deloitte to Winnipeg City Council, which
lays out the P3 options for the Disraeli Bridge with an estimate of possible
VfM relative to the PSC.
23
The 2008 document authored by Deloitte
suffers from severe shortcomings. Most worryingly, the data in the risk
valuation ano allocation appear to be crucial to the nnal value lor money
ngures ano the recommenoation to proceeo with the F3, but their source
is not given ano their levels are not justineo.
24
Nonetheless, these reports
are fuller than anything Edmonton has released on its LRT P3 proposals.
Their availability would indicate that release of such documents does not
prejuoice commercial connoentiality. Inoeeo, in the case ol the proposeo
wastewater treatment plant for Victoria and region, the whole business case
was released, together with sensitivity analysis around use of alternative
discount rates.
25

As Siemiatycki and Farooqi have argued,
...it is critical that the key project information that underpins the complete VfM
report is publicly released during the project planning process prior to approval,
enabling meaningful assessment and debate of the merits of a PPP compared to other
r.oroot oltrooti.. T/i io.loc coto o ri.ot rot f r.t fooo.io,
expected returns on private investment, and the data used to develop the risk premiums
that are applied to both the PSC and the PPP concessions in the VfM assessment.
26
20 City of Edmonton, Public Private Partnership
(P3) Policy, Policy C555 (Finance and Treasury
Department: May 26, 2010).
21 Council Challenged on Secret Decision to Run
SE LRT Privately, OurLRT News, October 16,
2012, http://ourlrt.ca/council-challenged-on-
secret-decision-to-run-se-lrt-privately/.
22 City of Edmonton, Public Private Partnership
(P3) Policy, Policy C555.
23 Deloitte, City of Winnipeg: Analysis of
Private Sector Involvement for the Disraeli
Bridge, Executive Summary, February 18,
2008, http://winnipeg.ca/publicworks/
MajorProjects/DisraeliBridges/DisraeliF
reewayProjectReportCouncil-May1408.
pdf; Winnipeg Council Minutes, May 14,
2008, http://winnipeg.ca/publicworks/
MajorProjects/DisraeliBridges/DisraeliFreewa
yProjectReportCouncil-May1408.pdf.
after the Global Financial Crisis, 23.
25 Ernst and Young, Capital Regional District
Core Area Wastewater Treatment Program:
Business Case in Support of Funding from
the Province of British Columbia, Addendum,
September 2, 2010, 23, downloaded
August 22, 2013 from http://www.
wastewatermadeclear.ca/documents/2010-
sept-business-case-addendum.pdf.
26 Siemiatycki and Farooqi, Value for Money,
297.
13
2. NEW TECHNOLOGIES AND SYSTEM
COORDINATION DO NOT REQUIRE P3s
Froponents have argueo that the Southeast to West LRT Line is suitable lor
P3 processes because it is a new line employing new technologies. However,
the use of new technologies does not necessarily demand a P3 approach.
Inoeeo, any expansion ol the LRT network will inevitably incorporate
new technologies relative to the existing line. Il the City can hanole new
technologies in the expansion of old lines, then surely it can handle it in the
creation of new lines.
Furthermore, a P3 approach is certainly not a guarantee of a well-
coordinated system. The decision to proceed with the construction of the
Southeast leg while the West leg remains on holo threatens to introouce
potential complications. The winning biooer on the Southeast project is
requireo to provioe operating ano maintenance costs lor the West leg, a
line they may not get the opportunity to build.
27
As even Councillors aomit,
this allows the possibility of two different companies building different
parts of the LRT system, with a single company dealing with operations
ano maintenance, opening up the possibility ol all kinos ol oisputes ano
litigation, with the City caught in the mioole.
28
Rather than ensuring a
well-coordinated system then, a P3 arrangement in fact sets the stage for
problems with system coordination. Indeed, the beginnings of some of these
problems may already be apparent in Edmonton.
The projecteo LRT expansions that will be hanoleo in the traoitional
manner ano operateo in house will require the City to builo up its project
planning and management capacity. Using the private sector to build and
operate the Southeast to West Line simply oelays the builoing ol that
capacity. The existing LRT system seems to work elnciently, ano there are no
obvious reasons why it could not be expanded without use of P3s and their
expensive nnancing.
Unlortunately, Eomonton City Council has not heeoeo this call lor public
release ol key inlormation. As a result, Eomontonians have been lelt
wondering about the wisdom of proceeding with the construction of the
Southeast leg ol the Valley Line LRT extension as a F3.
27 Ryan Tumilty, Edmonton Still Missing Funds
for LRT Project, Metro, March 14, 2013, http://
metronews.ca/news/edmonton/596281/
edmonton-still-missing-funds-for-lrt-
project/.
28 Ibid.
14
3. THE PUBLIC SECTOR COMPARATOR AND
VALUE FOR MONEY COMPARISONS WITH
OTHER P3s
Froponents ol unoertaking the Southeast Line through a F3 arrangement
have sought to demonstrate the superiority of the P3 approach by citing the
VlM outcomes achieveo with other F3s in Canaoa. Ior example, the VlM
ol the Alberta Schools Froject Fhase 1 is given as S118 or 1.7.
29
Alberta`s
own assessment ol that project puts the VlM at S97 million or 13.3.
30

The Alberta Schools Froject Fhase II is saio to yielo 29.3 over the FSC.
31

The VlM quoteo lor the South East Stoney Trail Ring Roao, Calgary, is
saio to be a remarkably high 7.3.
32

The comparisons between the VlM purporteoly achieveo in other F3s ano
the VlM that may ensue lrom the Southeast Line cannot be accepteo at
face value. The problem is this: most public sector comparators employ the
traoitional DBD or only partial DB. The business case prepareo by FwC
in relation to the Southeast LRT project, however, employs DB. Using DB
typically results in a lower VlM, as much ol the construction risk woulo be
transferred to the private sector in exactly the same way as it would under
the F3. Certainly, applying DB to the FSC ol these other projects coulo be
expecteo to reouce the VlM ol the F3 signincantly.
As a result, it is incorrect to make any sort ol oirect connection between
the VlM calculateo in relation to other F3s ano that expecteo lrom the
Southeast LRT extension. Such connections have the potential to misleao
the public about the VlM ol proceeoing with the Southeast Line as a F3.
29 PricewaterhouseCoopers, Business Case:
Southeast and West LRT Project, February
2011, 81.
30 Government of Alberta, P3 Value for Money
Assessment and Project Report: Alberta
Schools Alternative Procurement (ASAP)
Project Phase 1, June 2010, 21, http://
education.alberta.ca/media/1320820asapip3
valueformoneyassessmentandprojectreport.
pdf.
31 PricewaterhouseCoopers, Business Case, 81.
32 Government of Alberta, P3 Value for Money
Assessment and Project Report: Southeast
Stoney Trail (SEST) Ring Road Project,
Calgary, Alberta, September 2010, 4, http://
www.transportation.alberta.ca/Content/
docType490/Production/SESTVFM.PDF.
33 Stuart Murray, Value for Money? Cautionary
Lessons about P3s from British Columbia
(Canadian Centre for Policy Alternatives,
June 2006), 39.
34 Ibid., 40.
4. THE VALUE FOR MONEY COMPARISONS WITH
OTHER LRT PROJECTS
Froponents ol proceeoing to builo the Southeast Line as a F3 make much ol
the superior perlormance ol BC`s Canaoa Line, which seems to have been
useo as a template lor the Southeast LRT. However, there are a number ol
reasons that Edmontonians might do well to be cautious about emulating
the BC example.
Firstly, there are concerns about the process through which the decision was
maoe to unoertake the Canaoa Line as a F3. Stuart Murray has argueo
that the oecision to make the project a F3 was taken well belore the VlM
estimate was made.
33
The VlM assessment, by FwC, was maoe public only
in 200o, well alter construction hao begun.
34
Ano the assessment containeo
a number ol basic naws, such as oillerences in the assumptions unoerlying
the F3 mooel ano the FSC, ranging lrom train lrequencies, through
15
construction techniques, to rioership lorecasts. Ultimately, the VlM laileo to
compare apples with apples, which makes the analysis meaningless.
35

Ellorts to clarily assumptions in the VlM report by Ronalo Farks ,2009,, an
investigative ano lorensic accountant at Blair MacKay Mynett Valuations
Inc., Vancouver, concluoeo that Fartnerships BC useo an approach to VlM
that systematically discriminated in favour of P3s by using unsubstantiated
but likely exaggerateo estimates ol the risk translerreo, ano higher than
warranteo oiscount rates. Farks examineo lour BC projects. On the Canaoa
Line, risk transler was estimateo at S2!2 million lor the FSC ano S30 million
lor the F3, but no oetails or quantitative justincation were given lor this.
36

Since generally, where inlormation was available, the nominal, unoiscounteo
value ol costs were higher lor F3s than lor the FSCs, the assumption about
the discount rate to bring these costs into present value was crucial. For the
Canaoa Line, the VlM analysis useo a o oiscount rate to arrive at the
nnal VlM ol S92 million. This rate exceeoeo the transit authority`s cost ol
borrowing, and favoured the P3 by heavily discounting long-term public
sector lease payments to the private sector. Hao a rate ol even been
useo, the VlM woulo have lallen to only 1.!8 ol the FSC`s net present
value ol costs. A rate ol !. woulo have brought the VlM ol the F3 to
zero, and anything less, such as the Provinces long-term cost of borrowing
ol !.38 in 2008-09, or the 3. useo in F3s in the UK, woulo have leo to
the FSC oelivering net savings relative to the F3.
37

Seconoly, perhaps even more oisconcerting lor Eomontonians may be the
cuts in project scope that ensueo in BC as the costs ol the Canaoa Line
project escalateo. These involveo reouctions in the number ol stations ano
changes in the physical nature ol the line ano the way it was built.
38
Some
changes, such as shorter station lengths, may present problems of system
expansion in the future.
39
There were also several million dollars worth of
scope transfers, moving costs from the P3 to the public sector.
40
In sum,
the Canaoa Line project haroly seems like an example to emulate, whether
with respect to government accountability or the reouceo quality ol the
infrastructure that was built.
Froponents ol unoertaking the Southeast LRT extension as a F3 also
relerence another BC project, the 11km Evergreen LRT. This F3 takes
the lorm ol a oesign-builo-nnance ,DBI, arrangement, given that it is
a connection to an existing line, with responsibility for operations and
maintenance to remain with public provioer Translink. The 2013 project
report on the Evergreen LRT compared the DBF arrangement with a
FSC incorporating DB, ano concluoeo that the F3 woulo oller a VlM ol
S13! million or 10.1.
41
This relatively large VlM was the result ol the
successful bidder building a single line tunnel rather than a double one,
thereby speeoing up construction ano reoucing site risk. However, there is
no evidence that a DB approach would not also have incorporated these
35 Ibid., 41.
36 Ronald Parks, Evaluation of Public-Private
Partnerships: Costing and Evaluation
Methodology (Vancouver: Blair Mackay
Mynett Valuations, 2009), 26. Report
prepared for Canadian Union of Public
Employees.
37 Ibid., 26.
38 Ibid., 39.
39 Taras Grescoe, Straphanger: Saving Our Cities
and Ourselves from the Automobile (Harper
Collins Canada, 2012) as quoted in Mack
D. Male, P3 or not P3? Thats the Question
as We Try to Fund Edmontons Future LRT,
MasterMaq, March 14, 2013, http://blog.
mastermaq.ca/2013/03/14/p3-or-not-p3-
thats-the-question-as-we-try-to-fund-
edmontons-future-lrt/.
40 Murray, Value for Money?, 39.
41 Partnerships BC, Project Report: The
Evergreen Line Rapid Transit Project
(Vancouver, March 2013). The discount rate
used was the private partners internal rate
of return on this very short-lived project of
3.94%.
16
aojustments. As a result, the supposeo VlM may be nothing more than
imaginary. This example highlights a logical inconsistency in using DB in the
FSC: the DB approach invites creativity ano nexibility, with the result that
its precise nature cannot be known until proposals are receiveo. As a result,
VlM calculations that incorporate DB, like those unoerlying Eomonton`s
Southeast LRT F3 project, oller little by way ol concrete inlormation to
guioe responsible oecision-making.
5. PRIVATE OPERATION OF THE SOUTHEAST
LINE PROVIDES MUCH OF THE SUPPOSED
VALUE FOR MONEY. HOW?
The oocuments available on the Southeast Line make clear that taking
operation out ol the F3 approach reouces private sector returns signincantly,
and reduces the relative attractiveness of the P3 approach relative to the
FSC. Thus, the VlM calculation lalls lrom between 3 ano 10 to between
-2 ano o, with a likely 2. This brings the VlM calculation perilously
close to zero, meaning that the F3 Shaoow Bio is not clearly superior to that
ol the FSC with public operation ol the line. Retaining operations within
the F3 is what raises the VlM, bringing it supposeoly close to that ol other
F3s in Canaoa. This raises the question ol what the private sector woulo be
ooing to reouce operating costs in the F3. Coulo it be that the line woulo
use lewer workers, reouce wages ano benents, or use uncertineo labour?
What is it about private operation that lowers costs relative to the FSC? In
the absence of further information, there is reason to be concerned that
supposeo VlM might come at the expense ol those employeo to work on the
project.
6. ASPECTS OF THE RISK TRANSFER IN THE
VALUE FOR MONEY CALCULATION ARE
DIFFICULT TO BELIEVE
Risk transler is what is typically useo by F3 proponents to justily VlM.
However, there is reason to think that any risk transler within the Southeast
LRT P3 arrangement is minimal at best.
The FSC useo to evaluate VlM in relation to the Southeast LRT project is
based on a design-build arrangement, which commits the contractor to a
nxeo sum ano a nrm oelivery oate. Using DB ,as opposeo to DBB, as a FSC
shoulo reouce any risk assumeo to be translerreo to the private sector ouring
the important construction phase. Inoeeo, ol the 31 risks ioentineo in FwC`s
17
Southeast LRT Business Case, some 20 seem to relate to the construction
phase. It is haro to see why most ol them woulo not apply equally to the
FSC ano F3, e.g. tunnelling costs, utilities relocation, oesign risk, etc.
42
The
payment ol progress, or milestone payments, also reouces various risks,
especially nnancial, ol the private sector in construction phase. Again, this
shoulo be common to both the FSC ano the F3.
Even when DBB is useo in the FSC, the assumptions ol large amounts ol
risk transler must be treateo with a high oegree ol skepticism. Risk transler
assumptions are rarely spelled out fully, and if experience elsewhere is to be
taken seriously, are olten greatly exaggerateo.
43
In a situation such as the
Southeast LRT, where the FSC employs a DB rather than a DBB, there is
substantial reason to ooubt that risk transler is signincant.
Iurthermore, since unoer the proposeo arrangement lor the Southeast LRT
F3 there is no oemano or revenue risk oevolveo to the private sector, revenue
assumptions shoulo be lairly similar lor both the FSC ano the F3 Shaoow
Bio. This leaves only the maintenance risk as a potential area in which the
F3 is projecteo to oller signincant aovantages over the FSC. Maintenance
risk woulo seem to reler to a situation in which buoget constraints woulo
oelay or make impossible necessary maintenance work. While maintenance
provisions unoer a F3 woulo be guaranteeo, it is haro to believe that City
budget constraints would be so severe that public sector maintenance
would be impaired on infrastructure such as an LRT where safety must be
paramount.
Until the risk calculations estimateo by FwC are maoe public, skepticism
about the likely oegree ol risk transler in the case ol the Southeast Line is
warranted.
42 PricewaterhouseCoopers, Business Case, C3.
43 For the UK example, see: Dexter Whitfield,
The Global Auction of Public Assets: Public
Sector Alternatives to the Infrastructure
Market and Public Private Partnerships
(Spokesman: Nottingham, UK, 2010). For
Canadian perspectives, see: Hugh Mackenzie,
Doing the Math: Why P3s For Alberta Schools
Dont Add Up, prepared for CUPE Alberta,
2007; Matti Siemiatycki and Naeem Farooqi,
Value for Money and Risk in Public Private
Partnerships, Journal of the American
Planning Association, 78, 3 (2012): 286-299.
7. THE ADDITIONAL FINANCING COSTS OF THE
P3 ARE HUGE
Cost escalation ano the absence ol clear nnancing arrangements make it
very oilncult to assess the aooitional costs ol using private as opposeo to
public nnancing. Using plausible assumptions, however, we can estimate
these additional costs.
Given the nnancing pronle suggesteo by FwC, it woulo appear that
private lunoing woulo now be expecteo to reach one thiro ol S1.8 billion,
or S9! million, ol which S9 million might be equity, ano S3 oebt
or bono nnanceo. The FwC 2011 report suggests that, baseo on their
market sounoings with private businesses, any payments on private oebt
will be arouno 2 more costly than oirect borrowing. We oo not have 30
year borrowing costs lor Eomonton, but lor Winnipeg these are !.8.
18
Since Eomonton appears to be able to borrow at slightly lower rates than
Winnipeg, we estimate Eomonton`s likely borrowing costs at !. p.a. This
woulo mean the F3 borrowing rate might be o. p.a. The aooitional
costs ol borrowing at this rate over 30 years, relative to the estimateo cost
ol Eomonton borrowing oirectly, is likely to be S2!1 million over 30 years,
or S131 million in present value terms ,oiscounteo at Eomonton`s estimateo
cost ol borrowing ol !.,. Equity returns are estimateo by FwC to be
between 10 ano 1. This suggests payments to equity ol between S177
million ano S2o million over 30 years in nominal, unoiscounteo terms, or
between S9. million ano S1!3.3 million in present value terms.
In short, private borrowing ano equity will cost Eomonton between S!00
million ano S00 million more in nominal terms over the liletime ol the
project, or between S227 million ano S27 million more in present value
lrom the oate ol operations ol the line, than il the City hao nnanceo the
project itsell.
44

8. PROVISIONS TO ENABLE THE PUBLIC TO
SHARE IN GAINS RELATED TO REFINANCING
OR EQUITY FLIPPING ARE LACKING
Once the construction phase is complete ano the risk associateo with
it no longer relevant, it is common lor F3 projects to be rennanceo. It
is increasingly common for the public sector to share in the gains from
rennancing. Il the Southeast Line is to proceeo as a F3, provision shoulo be
maoe lor the City to share in any rennancing gains.
Apart lrom rennancing, increasingly the equity ol F3s in Canaoa is
being nippeo ano the public sector ooes not share in any gains.
45
In the
UK, returns ol over 0 were earneo on over 1,200 F3 equity nips.
46

In the absence ol any provision lor sharing pronts relateo to such nips,
Edmontonians stand to lose out as the private sector wins big.
44 It should be noted that the profile of the debt
(whether bonds or loans, number of years the
debt will be outstanding, borrowing costs,
etc.) is not known at this time. If, for instance,
the debt were to be repaid earlier, the
additional borrowing costs would be lower
than estimated.
45 Keith Reynolds, How Flipping Equity in P3s
Boosts Profits and Ends Up With the Projects
Being Run From Channel Islands Tax Havens,
Policy Note (CUPE-BC: March 9, 2011), http://
www.policynote.ca/how-flipping-equity-in-
p3s-boosts-profits-and-ends-up-with-the-
projects-being-run-from-channel-islands-
tax-havens/
46 Dexter Whitfield, The 10 billion Sale of
Shares in PPP Companies: New Sources of
Profit for Builders and Banks (European
Services Strategy Unit: County Kerry, Republic
of Ireland, Tralee, January 2011), http://
www.european-services-strategy.org.uk/
news/the-ps10bn-sale-of-shares-in-ppp-
companies-new/.
19
9. THE WISDOM OF 30 YEAR CONTRACTS
Locking the City ol Eomonton into a 30 year nnancing oeal brings with it a
host ol potential problems. Iirst ol all, it binos the City into payments that
are the equivalent ol oebt. Debt by another name is still oebt. Il the intent
ol the proposeo F3 is to reouce Eomonton`s nnancing problems, the answer
is not to be found in P3s.
The long time lrame also locks Eomonton into rigio operations,
maintenance, ano lile-cycle nnancial commitments that might prevent the
City benentting lrom potential new ways ol ooing things over the project
lifetime. It also builds rigidities into the LRT system as a whole over that
long time period.
10. PUBLIC OPINION AND THE LRT P3
Usually in Canaoa, F3s proceeo without any lormal checking on whether
or not the public supports this method of service delivery. In Regina,
however, a lormal relerenoum in September 2013 testeo public support
for a waste water treatment plant proposed as a P3.
47
While no such plans
exist in relation to the F3 proposeo lor the Southeast Line, Fublic Interest
Alberta oio commission the Environics Research group to conouct a ranoom
sample survey of households, to ascertain the level of public support for
the P3, and for handing over the operations to a private company. The
nnoings reveal oissatislaction both with the leoeral government lor lorcing
the F3 arrangement onto Council as a conoition lor lunoing ,o1 either
oisagreeo or strongly oisagreeo,, ano with the Council lor taking the
decision to privatize operations behind closed doors without a public debate
,71 opposeo,. A clear majority ol people surveyeo opposeo privatizing
the operations ,o!, ano expresseo concerns about the integration ol the
F3 into the LRT system as a whole ,o8,, about loss ol accountability il
things were to go wrong ,7,, about costs rising to guarantee pronts lor
the private partner ,o9,, ano about reouceo quality ol service ,9,.
48

These results are signincant statistically ano shoulo give the Eomonton City
Council cause lor renection on its oecisions.
47 Paul Dechene, Hey, Regina, Looks Like Youll
Get That Waste Water Referendum After
All, Prairie Dog, July 22, 2013, http://www.
prairiedogmag.com/congratulations-regina-
looks-like-youll-get-that-waste-water-
referendum-after-all/.
48 Environics Research Group, Public Interest
Alberta; Edmonton LRT Expansion Banner
Tables, 2013.
20
Conclusions and
recommendations
This review has examineo the case put lorwaro lor oelivering the Southeast
leg ol the Valley Line LRT extension as a F3 or, more precisely, as a
DBIOM F3. While there have been challenges to the planneo expansion
ol the LRT system, both conceptually ano in relerence to specinc routes
chosen, assessing these falls outside the scope of this document. The main
nnoing ol this review is that the arguments lor builoing the Southeast Line
using a P3 approach are far from convincing.
To juoge by what has been maoe available ol the assessments unoertaken
to oate, there is reason to ooubt that any potential risk transler is sulncient
to establish the superiority of a P3 over a traditional DBB or narrow
DB approach, when the estimateo aooitional nnancing costs ol a F3 are
considered.
Worryingly, there remain many unanswereo questions about the City
of Edmontons plans, in large measure because of the layers of secrecy
that surround the P3 proposal. The obsession with so-called commercial
connoentiality at the very earliest stages ol evaluation, belore the private
sector has even submitted a bid, is unwarranted and unnecessary, and
contraoicts important tenets ol the City`s own F3 policy.
What is perhaps even more troubling is that Eomonton City Council is
signalling its intention to proceeo with the project as a F3, oespite clear
public misgivings about the aooption ol a F3 approach, about the City being
forced into a P3 to obtain federal funding, about fears of problems with
system coordination, and about the wisdom of the private sector running the
operations and maintenance.
Irom what little is known about the project, the case lor the F3 approach
seems weak. As the risk transler claims seem questionable, the general
argument lor the F3 provioing VlM is oubious. Serious questions can be
raiseo about the lavourable VlM numbers in other F3 projects, both in
LRT ano in other sectors, useo by the consultants to justily ano promote
the F3 mooel. Il the F3 ooes go aheao as proposeo, the City will be paying
well above its own borrowing cost to pay private sector oebt ano pronts.
The 30 year contract perioo lor operations poses potential system ano
nnancial innexibility issues lor the City. Much ol the planneo expansion
to Edmontons LRT system will be built using the traditional approach,
meaning that the City will be obligeo to oevelop its technical capacity
to manage new lines and ensure system coordination. In using a P3
arrangement on the Southeast leg ol the Valley Line, the City woulo miss an
opportunity to begin to build this capacity.
21
The Southeast leg ol the LRT extension project has alreaoy encountereo
problems with cost escalation ano nnancing sulnciently severe to call into
question project timelines. While resulting oelays create haroship lor the
people of Edmonton who are awaiting much-needed improvements to
transportation inlrastructure, there may be a signincant silver lining il a
oelay provioes an opportunity to revisit the question ol how to manage the
LRT expansion so as to best serve the public interest.
RECOMMENDATIONS
1. Baseo on available inlormation, the City shoulo not proceeo with the F3
option, but builo the Southeast Line on the traoitional Design-Bio-Builo
or a Design-Build basis.
2. Il the City insists on consioering the F3 option, it shoulo open up all
documents and calculations employed so far in the evaluation of this
option, so that they can be publicly scrutinized.
3. The City ano FwC shoulo clearly justily ano explain the assumptions
that have gone into the assessments that have found in favour of a
P3 approach, and be prepared to discuss these assumptions in public
meetings.
4. Greater caution shoulo be exerciseo in making comparisons between the
value lor money purporteoly achieveo through other F3 projects ano that
expecteo lrom the Southeast Line. Comparisons shoulo be maoe only
when the public sector comparators employeo in the various projects are
truly comparable.
5. Eomonton City Council shoulo take seriously the expresseo concerns
ol the public about proceeoing with the Southeast Line through a F3
approach.
22
Appendix 1:
CITY OF EDMONTON POLICY ON
PUBLIC-PRIVATE PARTNERSHIPS
Edmontons policy on P3s is broadly consistent with that of the provincial
government.
49
City policy provioes lor the F3 approach to be consioereo lor
complex projects costing over S30 million that promise to:
a. deliver improved services and better value for money through
appropriate allocation ol resources, risks, rewaros, ano
responsibilities between the City ano private sector partners,
b. enhance public benents through clearly articulateo ano manageo
outcomes,
c. leverage private sector expertise and innovation opportunities
through a competitive ano transparent process,
d. create certainty arouno costs, scheoule, quality, ano service oelivery,
and
e. optimize use of the asset and included services over the life of the
P3.
50

Value lor money ,VlM, is oenneo in quantitative terms as the oillerence
between the risk-aojusteo net costs to the City ol oelivering the project using
traditional methods, and those incurred in delivering it as a P3. Net costs are
to be calculated in present value terms, meaning that all future costs, minus
revenues, are oiscounteo by an interest rate back to present oay values. A
public sector comparator ,FSC, is to be orawn up lor net costs likely to be
incurreo il the project proceeos along traoitional lines, ano this is to be
compared with a shadow bid for the P3 approach. The term shadow bid
is used because the P3 costing is an estimate only, since it precedes actual
private sector bids. If the present value of net costs of the shadow bid is
estimated to be lower than that of the conventional approach as represented
by the FSC, then the F3 approach is to be consioereo superior ano will be
pursued.
While the policy ooes not state which oiscount rate is to be useo, the practice
across Alberta is to use the public sector borrowing rate. While this practise
results in less of a bias in favour of P3s than the high discount rates used in
BC that are baseo at least partially on private sector returns to capital, they
are still higher than experts suggest they should be.
51

The policy also allows lor qualitative value lor money calculations to be useo
alongsioe the quantitative ones, but how these are to be unoertaken is not
elaborated upon.
52

49 Government of Alberta, P3Public Private
Partnerships: Alberta Infrastructure and
Transportations Management Framework:
Assessment (Edmonton, September 2006),
http://www.infrastructure.alberta.ca/
Content/doctype309/production/ait-p3-
assessmentframework.pdf; Government of
Alberta, Albertas Public-Private Partnership
Framework and Guideline (Treasury Board:
Edmonton, March 2011).
50 City of Edmonton, Fast Track LRT.
after the Global Financial Crisis.
52 Ibid., 2.
23
The sharing ol risk between the City ano private partners is consioereo
important. All risks shoulo be clearly ioentineo, assesseo quantitatively, ano
allocated to the party best able to handle them.
The policy lays out an organizational structure for implementing P3s,
provioing lor an Inoepenoent Iairness Aovisor to oversee the procurement
process, ano lor a Steering Committee, a Multi-Disciplinary Froject Team,
ano an inoepenoent Corporate F3 Iunction with the City Aoministration.
Council is a central component ol this structure, being responsible lor
appraising and approving P3 assessments, and monitoring P3 progress.
The intent of following the P3 approach is to provide incentives to the
private partner to meet cost ano timing targets, ano maintain elnciency ano
creativity throughout the project`s liletime.
As ol August 2013, the Southeast Line woulo appear to be at the Froject
Development Stage, with Requests lor Qualincations expecteo to be calleo
in October 2013.
53

Iigure 2 outlines the process through which F3s must pass.
53 Kent, Edmonton Council Votes to Keep
Seeking Southeast LRT Grants.
24
Figure 2. P3 project process lifecycle and approval
Figure 2: City of Edmonton, Public Private Partnership (P3) Policy, Policy C555 (Finance and Treasury Department: May 26, 2010).
25
Appendix 2:
REVIEWING THE DOCUMENTS: secondary
screening, business case, outline business
cases, and addendums
Very little publisheo inlormation is available on the proposeo LRT expansion
using a F3 arrangement. What lollows reviews all the oocumentation that
has been maoe available, both olncially ano unolncially, to show how the
project has evolveo. We are not aware ol any other oocuments that oeal with
the business case lor the F3 approach relative to builoing the project along
conventional lines.
Initially, FricewaterhouseCoopers ,FwC, was requesteo to unoertake what
is calleo a seconoary screening ol the projects, which means a high level
assessment of the wisdom of different alternate delivery methods. This
was completeo in August 2010, ano presenteo to an inlormation session
lor Eomonton City Councillors in December 2010.
54
Subsequently, FwC
was requesteo to prepare a Business Case, or a oetaileo nnancial assessment
ol alternative approaches, ano this was completeo in Iebruary 2011 at an
estimateo cost ol S900,000.
55
In January 2012, Council oecioeo to proceeo
initially only with the Southeast extension. Again, FwC was commissioneo
to unoertake a high-level Outline Business Case aooenoum, which was
prepareo in April 2012.
In May 2012, Council requesteo FwC to review the April exercise lor
the Southeast extension, but this time with the operating ol the system
remaining within City hanos. This was completeo in June 2012. Each ol the
FwC business case assessments concluoeo in lavour ol the City pursuing a
F3 lormat lor the project.
PwCs secondary screening of the Southeast
and West Lines projects, 2010
The nrst oocument relating to the business case lor applying a F3 mooel
to the LRT extension in Eomonton is a summary ol FwC`s seconoary
screening ol the Southeast ano West Lines projects. This report has not
been made available, but it has been possible to access a summary of a
FowerFoint presentation given to interesteo Councillors at an inlormation
session helo on December 9, 2010.
56
The summary indicates that the
presentation consisted of an overview of P3 policy, commercial criteria to
be followed, proposed performance measures, the meaning of and factors
consioereo in value lor money, an outline ol the quantincation ol risk, ano
Method.
55 City of Edmonton, Fast Tracking LRT
Construction.
Method.
26
a high-level summary ol the Business Case results. The conclusion was that
the F3 approach is valio, proposing a 30 year term Design-Builo-Vehicle-
Iinance-Operate-Maintain mooel ,DBVIOM,.
The presentation summary indicates a P3 would have a positive value
lor money ol between ano 10 relative to the FSC. In this case, the
FSC was not baseo on conventional methoos ol oelivery, but rather on
a design-build alternative that is said to offer more reliability in terms of
construction timing and costs. The presentation summary stresses that this
value for money would only be valid if the two lines were built at the same
time, the plan being to complete them by 201o. What the presentation
summary did not do, however, is show how these conclusions were arrived
at in quantitative terms. No oata are given on the value ol the FSC or the
Shaoow Bio, nor is there any inlormation given on how risks were quantineo
or allocated between the two potential partners. The presentation summary
is also silent on the discount rate used.
The presentation summary states that nnancing woulo be o7 lrom the
public ano 33 private, but there is no breakoown ol where the public
money woulo be louno, ano no oistinction between private equity ano
private borrowing. Once the lines become operational, the private sector
woulo receive monthly payments to cover its nnancing costs, together with
what is calleo a perlormanceavailability` payment to cover pronts. These
payments woulo be aojusteo as rioership changeo over time.
The business case: Southeast and West LRT
project, 2011
The FwC 2011 Business Case oocument was not maoe public ano, when
requesteo, neither the City nor FwC volunteereo to release it. As a result,
the Farklano Institute sought access unoer the Ireeoom ol Inlormation
ano Frotection ol Frivacy Act in May 2013, ano was given a severely
redacted version two months later. The redactions are so severe that barely
a number is lelt in the oocument. As a result, it is impossible to challenge
FwC`s calculations by changing assumptions or by using alternative nnancial
parameters. Nonetheless, the report does throw light on the process
that FwC went through to justily the F3 approach, ano it also suggests a
commercial structure, nnancial structure, ano the broao terms unoer which
a F3 is likely to be pursueo.
In assessing value lor money, the FwC oocument nrst lists all likely base
costs ano revenues belore risk is taken into account. Costs incluoe all capital
costs ano all operating costs, as well as project oevelopment costs that the
City is expecteo to incur, incluoing those lor property acquisition, social
27
and environmental assessment, legal services, administration, and publicity.
Regular maintenance ano lile-cycle or major asset replacement costs are also
listed. No data is available for any of these amounts, though the maintenance
section ooes connrm that the project is a thirty-year one. Base revenues are
mainly fares. The average fare per rider is redacted, as are non-fare sources
of revenue. Ridership numbers are given for both the opening date of
January 2017 ano lor 20!1, the City estimates a oaily rioership ol 33,800
lor the Southeast Line rising to !,800, while the equivalent numbers lor
the West Line are !0,000 rising to o3,00. The growth rate is interpolateo at
1.27 p.a. lor the Southeast Line ano 1.3! p.a. lor the West.
This base oata is then useo in oeveloping the Fublic Sector Comparator
,FSC,, unoer which it is assumeo that the City hires a contractor to oesign
ano builo the project, enters into a separate contract lor vehicle supply,
ano operates ano maintains the project itsell. The report replicates the
approach taken in the seconoary screening by comparing a shaoow F3 bio
with a Design-Builo ,DB, approach. Major assumptions on which both
the FSC ano F3 are oevelopeo incluoe completion ol construction by 31
December 201o, operations commencing on 1 January 2017, a thirty year
operations ano maintenance perioo, ano project enoing 31 December 20!o.
1 January 2011 being the oate lor oiscounting costs to present value, ano
the oiscount rate baseo on the City`s expecteo cost ol borrowing ,precise
number is reoacteo,. The use ol the City`s borrowing costs lor oiscounting is
less lavourable to the F3 approach than the use ol higher rates as in BC, but
more favourable to it than using social discounting rates.
57

The base costs ano revenues ol the FSC are nrst strippeo ol any provision
lor contingencies ano then aojusteo lor risk. The process ol quantilying
risk is laio out in some oetail in appenoices. It involveo nrst oeveloping a
matrix ol risks that might allect oesign ano construction, operations ano
maintenance, ano nnancial ano commercial aspects ol the project. So, in
the construction phase, lor instance, there might be risks associateo with
environmental or other approval oelays, property acquisition, construction
oelays, strikes, etc, while on the nnancial ano commercial sioe, there might
be changes to interest rates ,borrowing costs,, oebt availability, nnancial
positions ol sponsors, costs ol insurance, etc. These potential risks were
oetaileo ano presenteo to a two-oay workshop attenoeo by representatives
ol the City, FwC, CH2M Hill, Spencer Environmental, ano Thurber
Engineering. This apparently gave rise to a quantincation ol risk in the
matrix, ano an assessment ol its probability ano its likely oistribution
between the FSC ano the F3 Shaoow Bio. In other woros, the City`s
exposure to risk will be oillerent oepenoing on which approach is taken.
This oata was then run through a soltware program which conoucteo Monte
Carlo simulation, or ranoom sampling analysis, in oroer to oerive probability
57 Loxley, Public-Private Partnerships after the
Global Financial Crisis.
28
ol risk oistribution in terms ol low ,,, most likely, ano high impact ,9,
outcomes.
58
These risk estimates were then applieo to costs ano benents ol
both the FSC ano the F3 Shaoow Bio in the value lor money calculation.
Every aspect ol the risk oata was, however, reoacteo in this report, so there is
no way ol knowing how reasonable the assumptions are.
The VlM exercise concluoes that the F3 shaoow bio ollers a cheaper
alternative, but by how much is redacted. This conclusion is said to hold
even after a sensitivity analysis is applied to the data by varying assumptions
about oiscount rates, private borrowing costs, F3 elnciency, oillerent oegrees
ol public nnancing, ano a reouction in the contract term lrom 30 to 1
years. This analysis gives a range ol VlM results, some higher ano some
lower than the base VlM. Again, though, this oata is not maoe available lor
scrutiny.
59
The results are saio to compare lavourably with VlM assessments
ol 22 other Canaoian F3s, incluoing that ol the Canaoa Line in BC, upon
which the Eomonton F3 approach oraws heavily. That project is saio to yielo
a VlM ol !.o.
60

The organizational structure proposeo by FwC is the creation ol a Special
Furpose Vehicle ,SFV, to be owneo by the private sector which woulo have
responsibility lor creating ano running a DBVIOM F3, meaning it woulo
be responsible for designing, building the infrastructure, purchasing the rail
cars, nnancing, operating, ano maintaining the system lor a perioo ol 2-30
years after construction is complete.
61
The SFV, or concessionaire, woulo be
the sole point ol contact with the City. It woulo arrange sub-contractors il
necessary to unoertake the various tasks assigneo to it. It woulo also arrange
lor equity sponsorship ano lor private oebt nnance. It woulo then provioe
LRT services to the City, ano commit to maintain a certain stanoaro ol
service. FwC oio consioer two other options, one involving the City retaining
operations ano the other involving the City retaining maintenance ,but,
strangely, not both,. FwC concluoeo that whole-lile costs ol the system
would be lower if these functions were transferred to the P3.
58 For a discussion of risk assessment
techniques, see: John Loxley with Salim
Loxley, Public Service Private Profits:
The Political Economy of Public-Private
Sector Partnerships (Winnipeg: Fernwood
Publishing, 2010).
59 PricewaterhouseCoopers, Business Case:
Southeast and West LRT Project, 80.
60 Ibid., 81.
61 Ibid., 21-22.
29
City as owner
and fare setter/
collector
SPV
Availability &
Construction
Payments
Services
Capital
Investment
Lenders
(Debt)
Private
Finance
Sponsors
(Equity)
DB V O M
Return on
Investment
Subcontractors
DB Design Build V Vehicle O Operations M Maintenance
Figure 3. Proposed organization of the Edmonton LRT P3
Figure 3: PricewaterhouseCoopers, Business Case: Southeast and West LRT Project, February 2011.
Ior its part, the City woulo retain most il not all ownership ol the
infrastructure.
62
It woulo also be responsible lor acquiring real property,
setting transport policy, marketing services, procuring the project, oeveloping
bus interlaces ano scheouling, governing the project, incluoing cooroinating
with other levels of government, and obtaining necessary environmental
approvals.
63

Details ol the proposeo nnancial structure are reoacteo, but the general
argument being aovanceo is in line with the o7-33 public-private nnancing
proposeo in the secono screening oocument ol 2010. The suggesteo
portions, it is claimeo, maximize risk transler to the private sector, provioe
incentives for the private sector to exercise due diligence and are consistent
with available private capital.
64
Again, no sources are outlineo lor the public
money, ano no breakoown ol equity versus loans is given lor the private
money.
62 Ibid., 26.
63 Ibid., 26.
64 Ibid., 33.
30
A series ol commercial consioerations are laio out, but again the oetaileo
conclusions are reoacteo. It seems that FwC lavours progress, or milestone
payments, as progress is maoe ano verineo in construction, as opposeo
to substantial completion payments when construction is ended. Progress
payments reouce the neeo lor private sector nnancing to less than total
construction costs, and also save on capitalized interest and fee payments.
This approach is lavoureo in Alberta.
65

The mechanism lor paying the private sector to cover its costs ano risks in
the operating phase will be designed supposedly on the no service, no fee
principle, with payment being maoe only il an agreeo upon level ano quality
of service is actually delivered.
66
There will be a series of components to
the lee paio: an availability payment will cover private sector nnancing costs,
operations, ano maintenance, a payment linkeo to quality ol service, e.g.
cleanliness, ano a service level aojustment. This last will aojust payments
as costs increase due to increased ridership. Notably, this payment is not
intenoeo to transler any oegree ol revenue risk to the SFV.
67
In lact, FwC
argue that the SFV shoulo carry no revenue or oemano risk, on the grounos
that the City woulo retain control ol transport policy, incluoing lares, route
alignment, ano specincation ol service quality requireo. Iurthermore, in
a market sounoing session with eight prominent companies engageo in
the F3 business as concessionaires or equity provioers ,Acconia, Ballour
BeattyFarsons Brinckerholl, Bombaroier, John Laing, Macquarie, Flenary,
Siemens, ano SNC Lavalin,, FwC were tolo that the recent nnancial crisis
has reduced the private sectors appetite to accept a high degree of demand
risk.
68
Besioes, excluoing revenue risk lrom the arrangement will therelore
be simpler, which in turn makes the arrangement easier to aominister lor the
City.
69
In short, it is assumeo that the City woulo carry this risk.
FwC lists potential key inoicators upon which payments to the SFV coulo
be based, including system reliability and punctuality, a satisfaction survey,
managing customer comments, making inlormation available in real time`
for travellers, maintaining trains and stations in good condition, system
accessibility, safety, and ride comfort. Failure to meet these indicators
persistently coulo have nnancial implications lor the SFV, in the extreme
the termination of the contract. Provision would be made, however, for a
rectincation perioo.
Other commercial principles were proposeo by FwC. The nrst is that
changes in interest rates between the time ol bio submission to nnancial
closure shoulo be covereo in aojusteo payments by the City, but not those
taking place alter nnancial closure. Seconoly, they seem to recommeno
against the City sharing in any luture rennancing gains, as this seems
to be the practice in Alberta, but reoactions leave some ambiguity here.
Elsewhere, it is common lor the public sector to share at least 0-0
65 Ibid., 32.
66 Ibid., 33.
67 Ibid., 35.
68 Ibid., 36.
69 Ibid., 37.
31
in any rennancing gains.
70
The thiro is that FwC again recommenos
lollowing Alberta practice in requiring a substantial ,S20 million or more,
letter ol creoit to guarantee that the SFV puts nnancing in place, ano
successfully designs and builds the structure. The fourth is that three
situations are outlined in which termination may occur: default related
to non-perlormance ol critical obligations, lorce majeur, or public sector
termination. Again, these are orawn lrom the Alberta mooel. Iinally, FwC
suggests the appointment ol an inoepenoent certiner, to be nnanceo jointly
by the City ano the SFV, to act as an objective thiro party on progress
assessment, bill payment, disputes etc.
The market sounoing exercise relerreo to earlier suggests that major private
sector players in P3s support the idea of an Edmonton LRT P3, and support
the proposed organizational structure, as well as the proposed payment
mechanisms. There was reluctance to accept any rioership risk or non-
rioership revenue risk. While generally supporting the Alberta mooel, they
inoicateo no objection to sharing any rennancing gains. They supporteo
public lunoing in the o0 to 70 range. They anticipateo that private sector
gearing ratios woulo be 90 oebt to 10 equity, that returns to equity
,internal rates ol return, woulo be in the range ol 10 to 1, ano that oebt
margins ,the extent to which private borrowing exceeos the cost ol City
borrowing in this case, woulo oecline lrom 20 basis points ,2., to 200
basis points ,2, lor the start ol the project.
Outline business case addendum: Southeast
LRT project, April 2012
During 2011, the City Aoministration was instructeo to examine phasing
in the project, starting with the Southeast expansion, ano in January 2012
proceeoeo to contract an aooenoum to the 2011 Business Case. This hao
two major oepartures lrom the Business Case: it was to consioer the viability
ol F3 lor oelivering the Southeast expansion only, ano seconoly, the 201o
oeaoline to meet Expo 2017 was no longer relevant. The easing ol the
deadline was the result of Edmonton withdrawing its bid for Expo when
the leoeral government reluseo to contribute nnancially towaros it. The
analysis otherwise makes all the same assumptions as the 2011 Business
Case, but aoos consioeration ol possible problems that might arise in luture
if the LRT system is expanded in the face of proceeding with the P3. It
concluoeo that the DBVIOM was still the most appropriate option lor the
P3 delivery considering that if expansion occurs, contractual mechanisms
exist ano can be incorporateo in the Southeast Line contract to protect the
City`s interests.
73

73 PricewaterhouseCoopers, Outline Business
Case Addendum: Southeast LRT Project, April
2012, 4.
32
The Aooenoum concluoes that the project woulo still have a liletime ol 3!
years, the nrst ! being construction, ano that the F3 route was still optimal,
returning a VlM ol between 3 ano 10 compareo with the next-best
non-F3 alternative, the Design Builo. It is to be noteo that this VlM implies
some slippage at the lower eno relative to that in the combineo Southeast-
West project as oescribeo in the 2010 secono screening.
All relevant oata, except the bottom line ol the VlM calculation, is excluoeo,
purportedly for reasons of commercial sensitivity and the possible harming
ol the City`s negotiating position.
Outline business case addendum: Southeast
LRT project, June 2012
In May 2012, FwC were again askeo to provioe a Business Case Aooenoum
lor the Southeast expansion, but this time on the assumption that operations
woulo be retaineo by the City. Once operations are taken out ol the F3, its
attractiveness lalls relative to builoing the project in the conventional, or in
this case, the DB manner. The VlM was still positive lor the F3 Shaoow Bio
relative to the FSC, but now reouceo to 2 ol net FSC costs, with sensitivity
analysis showing a range ol between -2 ano -o ol those costs. The
report noteo the expecteo VlM was now less than that ol the Canaoa Line,
but that project oio incluoe operations. It also stresseo that actual VlM in
other Alberta F3s hao outperlormeo the initial VlM estimates.
74

FwC calleo another Market Sounoing, this time with nine unnameo
organizations of vehicle suppliers, design and build contractors, and P3
concessionaires. Though participating organizations expressed a preference
for operations being included, they would be happy to proceed with or
without them being in the P3. They also generally felt that any expansions
should be negotiated or re-tendered rather than pre-priced, given the
uncertainty of the timing.
All relevant oata, except the bottom line ol the VlM calculation, is excluoeo,
purportedly for reasons of commercial sensitivity and the possible harming
ol the City`s negotiating position.
As in the case ol all the FwC reports examineo, there is a strong statement
that the City neeos to put in place a team ol competent aovisors, ano an
appropriate governance structure, to ensure the Froject is well oenneo ano
appropriately structureo.
75

74 PricewaterhouseCoopers, Outline Business
Case Addendum: Southeast LRT Project, June
2012, 5.
75 Ibid., 5.
33
Application to the P3 Canada Fund
Eomonton applieo lor nnancial assistance lor the project to the F3 Canaoa
Iuno. In August 2012, the City Council met in-camera ano reverseo its
decision to perform operations in-house. The assumption is that pressure
was put on City Council by the F3 Iuno, ano this has been backeo up by
publisheo comments by Councillors.
76
Similar pressure was put on the
Winnipeg Convention Centre when it applieo lor F3 lunoing, the application
being rejecteo, in part at least, because the centre was not planning to hire
private management of the facility.
77
The City was, however, encourageo
to re-apply, suggesting that F3 Canaoa seeks to pressure the public sector
into reoesigning proposals to lurther private gain lrom public assets. With
operations once more in private hands, Edmontons application to the P3
Iuno was successlul, ano a grant ol S20 million was announceo March
!, 2013, although this is S10 million less than the City is seeking lrom the
federal government.
78

76 Federal Threat Forced Approval of P3 for LRT,
Group Claims, Edmonton Journal, October
16, 2012, http://www.cbc.ca/news/canada/
edmonton/story/2012/10/16/edmonton-
southeast-lrt-p3.html.
77 Bartley Kives, No Help from Ottawa to
Expand Convention Centre, Winnipeg
Free Press, January 5, 2011, http://www.
winnipegfreepress.com/local/no-help-
from-ottawa-to-expand-convention-
centre-112924489.html.
78 PPP Canada, Edmonton Light Rail Transit
System (Edmonton, Alberta: 2013), http://
www.p3canada.ca/project.php?id=17.
34
No Free Lunch: Financing the Priorities of Calgarians
7
0ARKL AND )NSTI TUTE s *UNE
8
11045 Saskatchewan Drive,
Edmonton, Alberta
T6G 2E1
Phone: 780.492.8558
Email: parkland@ualberta.ca
Website: www.parklandinstitute.ca
ISBN 978-1-894949-42-2

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