Project Agreement: New Bridge for St. Lawrence Project

 

Latest updates

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In January 2019, Public Services and Procurement Canada (PSPC) published updates related to the value of the contract (Project Agreement) on Buyandsell.gc.ca. (the Government of Canada's procurement information system that provides businesses and government buyers with open procurement and contracting data). The values on Buyandsell.gc.ca are contract specific. With respect to the Samuel De Champlain Bridge Corridor Project, Buyandsell.gc.ca does not include project management costs or costs related to all peripheral contracts. It is important to note that the values posted by PSPC include taxes. This table provides a breakdown of the adjusted Project Agreement costs before and after taxes. See Project Cost section for details of all costs related to the project.

On October 25, 2018, Signature on the St. Lawrence (SSL), the Private Partner responsible for the project, announced that the Samuel De Champlain Bridge would not be in service on December 21, 2018 but would open no later than June 2019. The Government of Canada and SSL are currently undertaking confidential commercial discussions related to the delay in the opening of the bridge and its impact on the Project Agreement which sets out penalties in the event of a delay.

On April 13, 2018, Infrastructure Canada and SSL announced a settlement agreement that, at that time, formalized the delivery date of the Samuel De Champlain Bridge as December 21, 2018 and ended the lawsuit filed by SSL in Quebec Superior Court.

The Samuel De Champlain Bridge Corridor Project Agreement, between the Government of Canada and Signature on the St. Lawrence Group (SSL), was signed on June 19, 2015 for the design, construction, financing, operation, maintenance and rehabilitation of the corridor.

The Project Agreement was the result of a rigorous, fair and transparent procurement process that allowed for an optimal balance between quality and cost.

In addition to promoting innovation in terms of design, construction and life cycle, the project agreement includes measures to encourage SSL to complete construction on time and for operation and maintenance during the service period, such as:

• monetary penalties if the bridge is not open to traffic by December 21, 2018;
• reduced service payments to SSL if operation and maintenance requirements are not met.

Visit SSL's website for updates on the project.

• Highlights of the Project Agreement
• Public Private Partnership
• Private Partner
• Project Cost
• Cost Savings – P3 vs Traditional Procurement
• P3 Procurement Process

Highlights of the Project Agreement

Final Completion Date:

• New bridge: December 21, 2018
• Entire corridor components: October 31, 2019

Sustainability:

• The Bridge will be built to last 125 years by incorporating features such as:
  • Use of stainless steel rebar in concrete at locations most exposed to de-icing salt
  • Use of high-performance concrete that will be more resistant to salt penetration, resistant to freeze-thaw cycles and resistant to abrasion
  • A high-performance drainage system (channeling of drainage water)
  • Use of a three-coat, high-performance paint system for steel components

Responsibilities of the Private Partner:

• Project design, construction, financing, operation, maintenance and rehabilitation
• Operating period of 30 years from the completion of the corridor, that is, until October 30, 2049
• Occupational health and safety on the worksite

Communications obligations of the Private Partner:

• Maintaining an Internet site and telephone line specific to the project to keep the public informed about the project
• Informing citizens of all major work that could affect them (ex: public information sessions, public service announcements, newsletters)
• Communicating about implementation of environmental mitigation measures – more than 200 mitigation measures identified in the environmental assessment are included in the Project Agreement

Method of Payment to Private Partner:

• Construction costs: Three payments will be made when major milestones are reached:
  • $500M when 50% of the work has been completed
  • $700M when the bridge is commissioned
  • $500M when the corridor is opened to traffic

• Monthly Payments: For the operation, maintenance and rehabilitation of the corridor
  • Payments began in July 2015 and will increase once the new bridge is in use and the entire corridor is opened to traffic
  • Payments are subject to indexing and are conditional on SSL's performance
  • Monthly payments will also be made to cover capital and financing costs. These payments will be made over a 30-year period

Public Private Partnership

The Samuel De Champlain Bridge corridor is being built as a public-private partnership (P3). This means that the private sector partner is responsible to deliver the project at a pre-determined price and will be subject to significant penalties if they fail to deliver on the contract.

This allows for a good balance of risk sharing between the government and the private partner and provides financial certainty to the government and to taxpayers. It also offers guarantees that the infrastructure will be well maintained for the duration of the Project Agreement.

The decision to use a P3 followed a rigorous financial and technical analysis and independent business case, which both concluded that a public-private partnership would be the most cost-effective method to deliver the project within an accelerated timeline.

Private Partner

Signature on the Saint-Lawrence Group is a consortium made up of the following businesses:

• SNC-Lavalin
• ACS Infrastructure Canada Inc.
• HOCHTIEF PPP Solutions North America, Inc.
• Dragados Canada, Inc.
• Flatiron Construction Canada Limited
• MMM Group Limited
• TY Lin International
• International Bridge Technologies Canada Inc.
• EBC Inc.

Project Cost

The total cost of the project is *$4.239 billion.

This amount includes the $3.977 billion contract (Project Agreement) signed between the Government of Canada and the Signature on the St. Lawrence Group on June 19, 2015, which covers the construction period commencing in June 2015), as well as a subsequent 30-year operating, maintenance and rehabilitation period.

In January 2019, Public Services and Procurement Canada (PSPC) published updates related to the value of the contract (Project Agreement) on Buyandsell.gc.ca.It is important to note that the values posted by PSPC include taxes. This table provides a breakdown of the adjusted Project Agreement costs before and after taxes.

The project cost details provided below reflect the budget as established in June 2015.

Table 1: Cost of the Samuel De Champlain Bridge Corridor Project (Nominal value, without taxes)

Type of Costs	Costs (in millions of dollars)
Total	$4,474.1
Construction costs	*$2,481.7
Operating, maintenance and rehabilitation costs	$754.2
Financing costs	$954.2
Cost of independent engineer	$22.2
Project management costs	$66.7
Planning and development costs	$91.9
Acquisition costs for properties and land	$103.2

 

*SSL has received an additional $235 million as per the settlement agreement announced on April 13, 2018. The agreement formalized the delivery date of the Samuel De Champlain Bridge as December 21, 2018 and ended the lawsuit filed by SSL in Quebec Superior Court. Subsequently on October 25, 2018, SSL announced that the bridge would not be in service on December 21, 2018. Confidential commercial discussions between the government and SSL are ongoing to determine the impacts of this delay on the Project Agreement.

Cost Savings – P3 vs Traditional Procurement

Following the signing of the Project Agreement, P3 Canada completed a value for money assessment. The analysis demonstrated that using the P3 model for this project resulted in net present value savings of approximately 33.7% - or $1.747 billion dollars, as compared to delivery of the project using the traditional method.

P3 Procurement Process

The procurement process, which resulted in the selection of Signature on the St. Lawrence Group as the private partner for the project, took 15 months and involved two stages.

The entire procurement process was overseen by a fairness monitor who provided an independent opinion confirming the fairness, openness and transparency of the process. In addition, all businesses within Signature on the St. Lawrence Group were confirmed to be in compliance with Public Service and Government Procurement Canada's Integrity Framework.

The fairness monitor provided a report at the RFQ stage and a final report.

Stage 1 – Request for Qualifications (RFQ)

During the RFQ stage, which took four months, companies were invited to submit a response outlining their interest and qualifications for the project. The process was open to any Canadian or international company.

Following receipt and evaluation of the responses from six consortia, the three highest ranked qualified respondents proceeded to the Request for Proposals (RFP) stage.

RFQ Timeline:

• RFQ release, March 17, 2014
• Information Session and Site Visit, March 31 and April 1, 2014
• Industry Day, March 31, 2014
• End of Enquiry Period, April 22, 2014
• Response Submission Deadline, May 7, 2014
• Response Evaluation Completion, June 2014
• Release of a review of the RFQ by an independent fairness monitor, July 17, 2014

Stage 2 – Request for Proposals

During the RFP stage,  which took just under 12 months, the three proponents qualified at the RFQ stage developed and submitted fully developed binding technical proposals that contained engineering and construction plans and rigorously defined technical elements — including the architectural requirements — and financial proposals that demonstrated accepted sound financial backing. Numerous meetings were held with each proponent to respond to their questions and two rounds of comments on draft project agreements were provided to ensure the best possible industry engagement.

Once received, the submissions were evaluated in two distinct phases by two separate teams of independent and unbiased evaluators.

• Phase 1 – Technical proposals were evaluated against the mandatory criteria and rated for compliance.
• Phase 2 – Financial proposals were evaluated for compliance and lowest cost.

Once the evaluation was completed, the preferred proponent was announced and an Early Works Agreement was signed to allow Signature on the St. Lawrence Group to prepare to begin construction while the necessary steps were taken to reach financial close on the Project Agreement.

RFP Timeline:

• RFP Release to Proponents, July 21, 2014
• Technical Proposal Submission Deadline, February 11, 2015
• Financial Proposal Submission Deadline, April 1,2015
• Announce Preferred Proponent, April 15 2015
• Signing of Early Works Agreement, May 6, 2015
• Financial Close, June 18, 2015
• Signing of the Project Agreement, June 19, 2015