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Alberta to begin work on first P3 highway (January 28, 2005)

EDMONTON, Alta. -- Construction will soon begin on Alberta's first public-private partnership (P3) highway.

EDMONTON, Alta. — Construction will soon begin on Alberta’s first public-private partnership (P3) highway.

The southeast leg of the Edmonton ring road will serve as a trial for P3s in the province when work begins this spring. The 30-year deal is worth $493 dollars, however the province says it would cost $4 million more if the province built the road the traditional way.

The project was first announced in 2003 with a price tag of just $300 million but the cost has already skyrocketed due to inflation and an "increased scope of the project," the province announced.

Under the agreement, the contractor will pay for the design and construction of the road. When it’s open to traffic, the province will make monthly payments to the contractor over 30 years to cover the construction costs as well as ongoing maintenance and operational costs. As a result of the partnership, the province says the road will be built sooner with no stop lights, it will be built on time and on budget (there are penalties for lateness and the contractor is responsible for cost over-runs) and the province will be protected from all risks such as construction defects and weather delays.

The federal government is chipping in $75 million through the Strategic Infrastructure Fund. Toll booths will not be allowed on the road and the operator is not allowed to put advertising billboards up alongside the road. The extension of Anthony Henday Drive S.E. will include 11 kilometres of highway including 24 bridges and five interchanges. Construction should be completed by October, 2007.

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