2014 New Building Canada Fund: National Infrastructure Component
Project Business Case Guide for Proposed Projects
Annex F – P3 Suitability Assessment Questionnaire

<< Previous | Table of Contents

Projects with total eligible costs of over $100 million are subject to the P3 Screen to assess their viability for P3 procurement. As a first step, all project proponents will have to complete the required P3 Suitability Assessment Questionnaire included in this Guide as part of the Initial Review process. Project proponents, with assistance from Infrastructure Canada officials, will need to work in consultation with PPP Canada Inc. to complete the Questionnaire. More information about the Questionnaire and the Suitability Assessment process can be found on PPP Canada Inc.'s website. Once completed, the Questionnaire will be submitted by Infrastructure Canada to PPP Canada Inc. for review.

No. Criteria Explanation Score Response Indicators
5 4 3 2 1
1 Asset Life: What is the anticipated useful life (i.e. service life) of this asset? The duration of P3 contracts tends to be tied to the useful life of the asset and, in general, longer-lived assets tend to be better suited to a P3.   Asset life is greater than 25 years. Asset life is 20–24 years. Asset life is 15–19 years. Asset life is 10–14 years. Asset life is less than 10 years.
Scoring Rationale for criteria 1  
2 Asset Complexity: How complex is the asset both with respect to construction and operations & maintenance? P3s lend themselves to complex investments. Complexity can arise as a result of the nature of the asset, the site on which it will be constructed, or the number of distinct asset classes involved in the investment.   Combines three or more asset classes or varying complexity (i.e. building + road + outbuildings). The planned investment by its nature is very complex. Combines two asset classes of medium complexity (i.e. rail line and station). Combines two asset classes of low complexity (i.e. road and toll booths, or one asset of higher complexity, water treatment plant). Single asset of low complexity.
Scoring Rationale for criteria 2  
3 Outputs and Performance Specifications (Construction): What is the availability of output specifications for the construction of the asset? P3s are characterized by the public sector setting their desired outcomes or outputs in the form of measurable technical output/service/performance specifications that provide the basis for performance based contracts.   Output specifications for the construction of same type of asset(s) exist and are available. Output specifications for the construction of similar asset are available. Existing conventional specifications can easily be converted into output or performance specifications for construction. Existing conventional specifications can be converted into output or performance specifications for construction. New technical outputs and specifications for construction will have to be developed.
Scoring Rationale for criteria 3  
4 Stability of Operational Requirements: Are the long term operational requirements of the planned asset relatively stable and predictable? Assets with stable and predictable performance and maintenance requirements lend themselves to P3 delivery.   Operational and maintenance requirements are predictable and stable. Operational and maintenance requirements are predictable, but have some instability based on known factors. Operational requirements are unstable, but maintenance requirements are predictable. Operations requirements are not stable and maintenance requirements are somewhat predictable. Operations and maintenance requirements cannot be predicted and are unstable over the useful life of the asset.
Scoring Rationale for criteria 4  
5 Performance Specifications and Indicators (Operations Period): What is the availability of operations- and maintenance-related performance specifications and indicators? Establishing and monitoring performance in relation to key performance indicators (KPIs) is an important element of performance based contracts, a foundational element of P3s.   Performance outputs and indicators for operations and maintenance are available. Performance outputs and indicators for operations and maintenance exist, but are not readily available. Performance outputs and indicators for operations and maintenance of comparable assets exist and are available. Performance outputs and indicators for operations and maintenance of comparable assets exist, but are not readily available. Performance outputs and indicators for operations and maintenance will have to be developed.
Scoring Rationale for criteria 5  
6 Life-Cycle Costs: Can most of the full life-cycle costs of the asset, mainly related to construction and fit-up (i.e. project costs) and long-term operations, including maintenance, be quantified upfront with reasonable assumptions and/or availability of historic data? Life cycle costs are very important factor in success of a P3. The public authority will pay for maintenance and/or operation through the P3 agreement and expects the asset to be well-maintained and efficiently operated at the lowest cost possible.   The total asset life-cycle costs are well understood and accurate estimates can be developed by the public authority. The total asset life-cycle costs are understood but estimates, while accurate are incomplete to some extent. The total asset life-cycle costs are well understood, and can somewhat be accurately estimated by the public authority. There is limited understanding of life-cycle costs but costs cannot be accurately estimated by the public authority. The total asset life-cycle costs are not well understood and cannot be estimated by the public authority.
Scoring Rationale for criteria 6  
7 Revenue Generation: Does the planned investment have inherent scope to generate any revenue? Revenue generation is not a requirement for a successful P3. However, where an asset could potentially generate revenue and reduce the burden on public funds, the P3 model is ideally suited to leveraging that potential.   The planned investment will generate revenues and the private sector may be willing to assume associated revenue risk. The planned investment could generate revenues and private sector may be willing to share revenue risk. The planned investment could generate revenues and the private sector's willingness to accept revenue risk is unknown. The planned investment could generate minimal revenues and the private sector is unlikely to accept any revenue risk. It is unlikely that the planned investment will generate any revenues.
Scoring Rationale for criteria 7  
8 Private Sector Expertise: How many private sector firms have the capacity to deliver and maintain this type of asset? The availability of private sector expertise is critical for two reasons: (1) ensuring a competitive bidding environment; and (2) ensuring that there is private sector capacity to perform the functions and manage the risks envisioned in the P3.   There are more than 5 private sector firms capable of forming teams with the expertise to design, construct and maintain/operate this type of asset. There are more than 5 private sector firms capable of designing, constructing and maintaining this type of asset. Operations capability is not yet determined. There are 3 to 5 private sector firms capable of forming teams with the expertise to design, construct and maintain/operate this type of asset. There are 3-5 private sector firms capable of designing, constructing and maintaining this type of asset. Operations capability is not yet determined. There are fewer than 3 private sector firms capable of forming teams with the expertise to design, construct and maintain/operate this type of asset.
Scoring Rationale for criteria 8  
9 Market Precedents:Have investments with similar requirements and of similar size and scale been delivered through the P3 model? The existence of P3s for similar assets is a key indicator regarding the viability of a P3.   Investments of similar size and scope have been delivered as P3s in Canada. Smaller investments of similar scope or, of similar size but smaller scope have been delivered as P3s in Canada. Investments of similar size and scope have been delivered as P3s internationally. Smaller investments of similar scope or, of similar size but smaller scope have been delivered as P3s internationally. Investments of similar size and scope have not been previously delivered as P3s.
Scoring Rationale for criteria 9  
10 Nature of Development Site: What is the nature of the development site (greenfield vs. brownfield) and what proportion of this investment involves the expansion/renovation of existing facilities/assets? In general, investments involving all new construction on previously undeveloped sites lend themselves to maximizing risk transfer to the private sector.   Asset is new construction on an undeveloped site. Asset is new construction on an already developed site. The planned investment involves at least 50% new construction and also significant renovations to the existing asset. The planned investment involves expansion and/or refurbishment of an existing asset. The planned investment mainly involves refurbishment, modernization, minor renovation, or involves integration of new facilities with existing facilities.
Scoring Rationale for criteria 10  
11 Scope for Private Sector Innovation Gains: To what extent will the public sector be able to rely on output/performance-based requirements/specifications? The scope for private sector innovation is inversely related to the public sector's need to be prescriptive.   The public sector is able to use output specifications for all phases of the investment life-cycle. There are very few areas where the public sector feels it must be prescriptive/use input-based specifications. The planned investment requirements will be a mix of input-based and output-based requirements. The planned investment's design and construction will be based on input specifications. The public sector must define specific input requirements for the majority of the asset.
Scoring Rationale for criteria 11  
12 Potential for Contract Integration: Which elements of the potential P3 (i.e., design, build, finance, maintain, operate) can be integrated into one contract? One of the mechanism by which P3s generate value is the integration of various elements of the potential P3 (i.e., design, build, finance, operate/maintain). The greater the potential for integration, the more likely a P3 will be viable.   All elements of a potential P3 (i.e. design-build-finance-maintain-operate) could be integrated into one contract. Design-build-finance-maintenance and some operations could be integrated into one contract. Design-build-finance and some maintenance could be integrated into one contract. At least design- build-finance could be integrated into one contract. Only two elements could be integrated into one contract.
Scoring Rationale for criteria 12  
<< Previous | Table of Contents
Date modified: