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8| INFRASTRUCTURE PROJECTS "THERE'S A SHIFT UNDERWAY OVER THE PAST 18–24 MONTHS. WE'RE STARTING TO SEE A BIT OF A MOVE AWAY FROM THE SOCIAL ACCOMMODATION INFRASTRUCTURE THAT CONSTITUTED THE FIRST REAL WAVE OF P3s TOWARD MORE ECONOMIC INFRASTRUCTURE." P3s are playing an important role in delivering infrastructure; currently, says Romoff, "Canada has 198 P3 projects across a variety of sectors. For those projects that have reached financial close, the value is in excess of $60 billion." As the P3 market evolves, "there's a shift underway over the past 18–24 months," says Tara Mackay, a partner at Torys LLP and member of the firm's Infrastructure and Energy Practice. "We're starting to see a bit of a move away from the social accommodation infrastructure that constituted the first real wave of P3s toward more economic infrastructure." It's not that the use of the P3 model for large-ticket items such as hospitals, schools, detention centres and courthouses, primarily provincial projects, is stalled; it's that the pressing need for the renewal of and new municipal infrastructure projects, according to Mackay, is opening up a much wider range of possibilities, such as water/wastewater projects, transit, bridges and roads. Clearly, there's a need in the water/wastewater infrastructure sector. According to a recent wastewater study from PPP Canada, a Crown agency mandated to promote utilization of the P3 model, the estimated cost of replacing wastewater infrastructure already rated as fair/ poor is $39 billion, and $25.9 billion for water infrastructure already rated as fair/poor. The cited figure reflects the anticipated as well as immediate need for replacement. Darryl Brown, a partner at Gowling Lafleur Henderson LLP and member of the firm's Environmental, Real Estate and Urban Development Group, thinks there's potential for P3 activity in the water/wastewater sector, yet cautions it does pose unique challenges directly attributable to potentially smaller projects (i.e., $50M–$100M versus $2.5M–$1.5B for a hospital). "I think a lot of people in the industry keep thinking a bit of a driver in the future of P3s will be water/wastewater projects," Brown says. "While the public side might initially see the advantages of the P3 model in a smaller project, the pursuit costs and time involved – for example, hiring financial, technical and legal advisors – could dampen their enthusiasm." From the private side, "if it's a smaller project, and there isn't going to be significant equity investment in the infrastructure, and/or there aren't going to be significant development fees to offset the fact that the private equity bidder is likely going to lose two out of the three times it bids on a project, then the pursuit costs are a lot of money to expend," he says. A small facility, he points out, "doesn't necessarily mean substantially less design and development fees, and on smaller projects the honorarium that gets paid by the gover ties i the l pursu ernm to in uniqu spon "N Lexpert®Ranked Lawyers Beaumont, D. Robert Beavis, Merie-Anne E. Osler, Hoskin & Harcourt LLP (416) 862-5861 rbeaumont@osler.com Gowling Lafleur Henderson LLP (416) 814-5631 merie-anne.beavis@ gowlings.com Mr. Beaumont, also a professional engineer, focuses on infrastructure, P3, construction and procurement law. His clients include owners, developers, contractors and lenders. His infrastructure experience embraces power and transportation facilities. ROB-Infrastructure.indd 8 Ms. Beavis acts for public- and private-sector clients, as well as for lenders, on a variety of infrastructure and mining projects. Her P3 mandates include courthouses, hospitals, schools and learning centres across Canada. Bennett, Chris Berg, Ira Bertoldi, Linda L. Bogaty, Jane Bogd McMillan LLP (416) 865-7858 chris.bennett@ mcmillan.ca Goodmans LLP (416) 597-4105 iberg@goodmans.ca Borden Ladner Gervais LLP (416) 367-6647 lbertoldi@blg.com Dentons Canada LLP (514) 878-5846 jane.bogaty@ dentons.com Blake Grayd (604) jp.bo Ms. Bertoldi's electricity practice includes project development and ownership structures, project finance and corporate finance, mergers & acquisitions, regulatory issues, contract negotiating and advising regulated utilities and their shareholders. Ms. Bogaty's domestic and cross-border financial services practice involves a wide variety of financings. She advises corporate borrowers, individual lenders and lending syndicates. She also counsels equipment manufacturers and distributors. Mr. B involv law a projec secon His c traditi funds entre variet privat Mr. Bennett's practice focuses on project finance with an emphasis on infrastructure and PPPs. He has acted for several major Canadian infrastructure projects in a variety of sectors, including health care, transportation and national defense. Mr. Berg focuses on P3s, alternative finance projects, public procurement and complex construction projects. He represents public/private-sector clients on transportation, bridge and infrastructure projects and revenuegenerating asset transactions. 13-08-06 9:55 AM

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