Alberta rejects P3 approach for building 19 new schools

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Alberta rejects P3 approach for building 19 new schools

The Government of Alberta has canceled the tender process for designing, building financing and maintaining 19 schools under a public private partnership contract.

While the decision will save the government CAD$14-million, Alberta Infrastructure Minister Wayne Drysdale said it will now take longer for some of the schools to be built.

Drysdale announced the government rejected the P3 bid on Tuesday, saying the higher price of the only bid for the contract is related to the big amount of ongoing tender processes in the province. Minister Wayne Drysdale said:

"In a time where the construction industry is heated, they're not going to go after the small margin bids.  They're going for the bigger margins."

The only bidder for the project was Calgary's Gracorp Capital and Graham Construction. The government received a bid for CAD$571 million to develop the PPP project. A Gobernment analysis determined that the traditional bidding process would cost CAD$557 million.

In late November 2013 we reported that given there is only one bidder, the Minister said that a public-private partnership (P3) contract will only be secured if value for money is shown.

This P3 schools bundle was part of Premier Redford's commitment to build 50 new schools and modernize 70 more, and part of government's Building Alberta Plan that will invest CAD$1.4 billion in new schools and major modernization projects from 2014 to 2016.

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