• FAQs - Public Private Partnerships (P3s)

    Infrastructure Ontario uses a made-in-Ontario approach to delivering large, complex public infrastructure projects. Public-private partnerships (P3) leverage the expertise and competitiveness of the private sector to successfully expand, modernize and replace Ontario's aging infrastructure.

    Not every project is the same and we recognize the importance of using the right tool for each project.  IO's P3 approach includes a variety of models to ensure projects are procured and delivered effectively.

    Under P3s, provincial ministries and/or project owners establish the scope and purpose of a project, while design and construction work is carried out - and often financed - by the private sector. Typically, only after a project is completed will the province complete payment to the private-sector company. In some cases, the private sector will also be responsible for the maintenance of a physical building or roadway. For some very complex projects, there are situations where even after extensive planning and due diligence, there remain significant risks that are difficult to quantify or manage in advance of a project beginning.  In cases like this, the partnership may require the public and private partners to share such risks (for example, an Alliance model).

    Overall, Ontario's P3 approach allows projects to be delivered more efficiently and more cost effectively than traditional procurement. P3 also protects taxpayers from cost overruns by transferring project risks to the party with the expertise, experience and ability to handle that risk best.

    Projects are guided by five key principles: transparency, accountability, value for money, public ownership and control, and public interest.

    IO is a Crown agency created to assist the Province in delivering its long-term infrastructure plan, on time and on budget. The Ministry of Infrastructure, in consultation with other government ministries, assesses, prioritizes and determines the overall infrastructure renewal budget. The ministry also identifies which projects will be assigned to IO.

    IO's main responsibilities include:

    • leading and implementing the procurement process
    • assisting project owners with bid documents, including design and output specifications
    • receiving and evaluating submissions
    • negotiating and awarding contracts
    • project managing the construction of the project at the request of the project owner
    • providing contract and asset management services for projects with a 30-year maintenance term

    No. P3 is only used on the largest, most complex projects in the province. IO also manages thousands of projects annually through traditional delivery. We believe there is room for both models.

    Each year since 2013 IO has engaged an independent, third-party consultant to review the performance of its P3 projects that have reached Substantial Completion in the prior fiscal year. The reports can be found here.

    Costs of private-sector borrowing are more than offset by the risks developers assume for the project, including the risks of increased construction costs and/or schedule delays as the project develops. Developers are not paid out until a project is substantially complete. They take out a loan to finance construction costs and commit to the province and its lenders to have it finished by a fixed date for a fixed price. If the winning bidders on P3 projects don't complete construction by their target completion date, additional costs will accumulate - for which the developer, not taxpayers, is responsible.

    When you take into account all costs - including risks - P3 delivery costs less than the traditional way of delivering large, complex projects.

    There are many potential risks for any complex project in terms of design errors and omissions, unforeseen site conditions, labour and material costs, as well as ongoing maintenance and financial risks. In P3 contracts, many of these risks are transferred to the builder.

    All assets, such as hospitals, courthouses and roads, constructed using the P3 delivery model are publicly owned and publicly controlled.

    Once a project enters into the procurement phase, a request for qualifications (RFQ) invites bidders to provide information and demonstrate proven abilities in a number of areas including their financial strength, past experience, capacity and more. Following the RFQ, IO publicly announces the short list of prequalified bidders on our website. The short list or prequalified bidders announcement will provide detailed information about the teams that have committed to participating in the request for proposals (RFP) stage of a project. Information about past and current P3 projects can be found on our Projects webpage.

    A Request for Qualifications (RFQ) is issued for a project via www.merx.com to invite interested companies to submit their qualifications for a project.

    Contractors and subcontractors of all sizes play critical roles in all P3 projects. We encourage interested businesses to contact prequalified bidders directly to inquire about opportunities.

    When possible, IO organizes networking sessions to provide opportunities for interested bidders to meet local subcontractors.

    A Request for Qualifications (RFQ) is issued for a project via www.merx.com to invite interested companies to submit their qualifications for a project. Contractors and subcontractors of all sizes play critical roles in all AFP projects. We encourage interested businesses to contact prequalified bidders directly to inquire about opportunities. When possible, IO organizes networking sessions to provide opportunities for interested bidders to meet local subcontractors.

    IO works with the client (e.g. a government ministry or project owner) to evaluate Request for Qualifications (RFQ) submissions and to determine the highest ranking project teams. Following the RFQ, IO announces the short list of prequalified bidders to provide detailed information about the teams that have committed to participating in the request for proposals stage of a project.

    A RFP is issued to prequalified or shortlisted project teams only. The RFP sets out the conditions and specifications required to undertake the project and asks bidder to submit their proposals to meet and/or exceed these specifications.

    For infrastructure projects to be successful, the companies delivering them must have a sound understanding of Ontario's business and regulatory landscape. Local knowledge includes familiarity with local building code requirements, health and safety regulations, and other regulatory measures.

    Following evaluations of RFP submissions, the highest ranking bidder is identified as the “preferred proponent.” IO and the client proceed to negotiate a final contract with this proponent. Once negotiations with the proponent are complete, we announce the winning bidder.

    Construction can begin following the signing of the Project Agreement or contract.

    Substantial completion means construction is complete and ready for use in accordance with contractual requirements. It is the time at which the project is handed over to the owner/client.

    Alliance Contracting is a form of P3 that delivers capital works projects using a collaborative approach between the public sector (the owner) and the private sector parties (non-owner participants). Both parties share risks and responsibilities equally and make unanimous principle-based decisions on key project issues while achieving improved project solution.