The contract with Hospital Infrastructure Partners
Under the terms of the project agreement, Hospital Infrastructure Partners will receive annual payments from the province over a 30-year period. These payments cover design, construction, project financing and building maintenance for 30 years after construction.
The contract with Hospital Infrastructure Partners is for a fixed price of $2 billion in today's dollars to be delivered by a fixed completion date. The new Oakville Hospital will be delivered using Infrastructure Ontario's Alternative Financing and Procurement method. This method transfers most project risks to Hospital Infrastructure Partners.
For instance, the project agreement makes Hospital Infrastructure Partners responsible for any design issues, project management and sub-contractor coordination, increases in construction material prices and labour costs, schedule and project completion delays, and other related construction risks. In the past, these risks were the responsibility of the public sector.
The province's 30-year maintenance agreement with Hospital Infrastructure Partners will ensure that the physical components of this new facility - roofing structure, windows, floors, elevators, heating and cooling systems and other components - are kept in excellent working condition over the term of the agreement. Under the project agreement, if the building requires a new roof or a new boiler, the private sector replaces and pays for it. The public sector has built in a 30-year guarantee for these physical features.
Overall Payment to Hospital Infrastructure Partners
Over the 30-year life of the contract, the total payments to Hospital Infrastructure Partners, when adjusted for anticipated inflation, will be $2.7 billion. Annual payments to Hospital Infrastructure Partners are performance-based. Payments can be withheld if Hospital Infrastructure Partners does not meet the agreed-upon performance standards.
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