Owners turn to PPPs, JVs, and Alternative Delivery Methods as Projects Get More Complex

The American architect Daniel Burnham is credited with saying, “Make no little plans; they have no magic to stir men’s blood.”

If Burnham were alive today he would be thrilled by the awe-inspiring construction projects underway in 2016.

The world’s largest bridge, longest gas pipeline and biggest airport are all under construction in China. Elsewhere on the planet, soaring skyscrapers, expanding metropolitan areas, and smarter, more efficient transportation corridors are coming into view.

Megaproject Delivery: PPPs, JVs, and Other Alternative Methods

The rise of megaprojects is changing how projects are delivered. Gone is the day when public entities automatically chose some variant of design-bid-build delivery for planning, procuring and completing a construction project. Instead, a growing number of public entities are recruiting private sector capital and expertise and turning to alternative delivery methods.

Alternative delivery allows greater flexibility in planning, design and construction. Depending on what is right for a particular project, approaches vary from construction manager at risk to design-build and design-build-finance-operate-maintain. Coupled with alternative financing methods like public-private partnerships (PPPs or commonly referred to as P3s in the U.S.) and joint ventures, alternative delivery is enabling ambitious projects to move forward by providing higher levels of accountability and a wider allocation of risk.

Example PPP (P3) Megaproject: The Regina Freeway Bypass

One project that showcases the new delivery dynamic is the $1.88 billion Regina Freeway Bypass, the largest transportation infrastructure project in the history of Canada’s Saskatchewan Province. The project is a PPP made up of the Government of Saskatchewan and a joint venture consisting of four of Canada’s largest construction companies: Graham Infrastructure, LP; Parsons Canada, Ltd.; Carmacks Enterprises; and Vinci Construction Terrassement.

With the goal of relieving congestion and improving safety in the capital region, the joint venture has agreed to design, build, finance, operate and maintain approximately 105 kilometers of roads and 12 new overpasses. According to an independent report, the decision to go with alternative financing and alternative delivery will shave approximately six years off the project timeline and 17 percent off the budget. The Value for Money Assessment Report completed by Ernst and Young found that “cost savings will be achieved through construction and design innovations, life-cycle optimization, risks shifted from the public to the private sector and a fixed-price project agreement.”

Overcoming Alternative Project Delivery Challenges

Download Alternative Delivery White PaperAt Aconex, we’ve supported the successful delivery of hundreds of alternative delivery projects. In the hope that others may benefit from reading about the challenges our customers have overcome we’ve collected their experiences on large infrastructure projects in a new whitepaper, Alternative Delivery: Sharing Risk and Building Trust.

Or, view our on demand webinar, How Strategic Alliances and Alternative Delivery Methods Drive Project Success. Previous webinars featuring HNTB, Fluor and Parsons can also be viewed here.

Like what you’ve read? Check out our other recent blog posts in this series:

  1. Public-Private Partnerships & The Global Infrastructure Challenges of 2016
  2. Top 4 Pitfalls of Alternative Delivery Methods and How to Avoid Them
  3. 9 Best Practices to Successfully Deliver Infrastructure Megaprojects
Dexter Bachelder

Dexter Bachelder

Senior Vice President at Oracle's Aconex
Dexter Bachelder is a Senior Vice President for Oracle's Aconex, a leading collaborative construction and engineering management software
Dexter Bachelder
  • keitumetse mojasagagwe

    PPPs remains an illusion to many countries in Africa, the traditional procurement systems are deeply entrenched. South Africa is doing remarkably well with embracing of PPPs. My country Botswana ought to emulate this success – but there is glimmer of hope!…