P3 Proponents and Pre-Construction
- Proponents and partners:
- Liricon Capital: Locally-based family-owned holding company. Liricon also owns the Norquay Ski and Sightseeing Resort, and is working with the Town of Banff and Parks Canada to transform the train station into a multi-modal eco-transit hub.
- Plenary (owned by CDPQ): Has US $51 billion assets under management and is the leading P3 developer in North America.
- Canada Infrastructure Bank (CIB): Has partnered with CDPQ on the $6.9 billion REM Line in Montreal and contributed $165 million to the City of Calgary Zero-Emission Bus Project.
- Design Phase cost estimate is $105 million (engineering, project feasibility and permitting).
- Proponents and CIB to fund $95 million, Government of Alberta (GOA) to provide the remaining $10 million.
- Staged approach – the GOA to provide matching $1.5 million (ridership and capital costs analysis).
- Compliments City of Calgary-led Airport Connection Study (done concurrently).
- CIB requirement required to determine final investment decision.
- No funding or financing is asked of Bow Valley Communities.
- Bow Valley Communities engaged in the location and design of stations.
- Additional costs over and above the basic stations will be determined.
Construction Phase
- Proponents and CIB will pay 100% of the construction costs.
- Accept the risks of cost overruns, operating costs and ridership revenues.
- This financing has no recourse to the Alberta Taxpayer.
Operating Phase
- Ridership revenues to cover all operating costs and 50-75% of the cost of repaying the capital investment.
- GOA asked to make long-term performance payments capped at $30 million annually.
- GOA may ask the Bow Valley Communities to contribute proportionately to the benefits.
- Reduced GOA repayment of capital if ridership revenue exceeds 20% of BNP forecast.
P3 Benefits
- P3 financing structure results in significantly lower contributions from GOA and Bow Valley Communities.
- Standard transit funding model comparison (capital cost one-third split among Federal, Province and Municipal).
- Transit ridership typically covers less than 50% of operating costs.
- Ultra-low CIB financing at a lower cost to GOA and municipal sourced financing.
- CIB and proponents accept long-term project risk.
- CIB financing does not crowd out federal funding for other transit projects.
- Government contributions are less than half of Vancouver’s successful Canada Line.
- Less than 15% of the per additional passenger contribution the GOA is making to the Green Line.
- Minimal downside risk, shared upside benefits with reduced repayment of capital.