Infrastructure Ontario pipeline reflects unprecedented civil deal flow

CAD 11.8bn in new projects anticipated

The pipeline for P3 projects to be delivered by Infrastructure Ontario (IO) reflects an unprecedented number of civil deals.  “The pipeline represents the shift that we have been talking about over the last year or two,” Divisional President, Project Delivery Ehren Cory told InfraAmericas. “It really is the next evolution.”  

Cory said that the Regional Express Rail (RER) is the “big volume” program.  The project involves the expansion of the GO Transit network from a commuter system to provide all day service across the greater Toronto area.  

RER is to be delivered under the dual guidance of IO and Metrolinx and is divided into two categories: the in-corridor projects that consist of new track, grade separations, tunnels, overpasses, signaling and electrification; and the off-corridor projects such as new stations, enhancement to existing stations, customer space and platform extensions.

Some of the off-corridor work intended to enable the Go Transit Stouffville Corridor Station Improvements has already commenced.

Cory said that the service improvements, which range in value from CAD 100-500m (USD 73.8- 369m)will continue to roll out on an approximate monthly schedule starting in 2017. These early works, valued at CAD 3bn, will be procured as DBF or DB projects over the next 12 months, and there will be no long-term [operating] components, he added. 

“They are shorter and snappier, and we want to get them into the upcoming construction windows,” Cory added. 

Regional Express Rail major projects

The electrification of the network is referred to as package three. The work follows Metrolinx President and CEO Bruce McCuaig’s statement during CCPPP 2015 that identified the electrification of 163 miles of rail as a DBFM opportunity. 

Electrification
Cory said that the agencies will procure a wave of new stations called “package 2 projects” once the enabling works have been completed. He noted that the delivery model is still undecided but that there could be some scope for a maintenance component.

There is no time frame associated with the electrification project, but Cory indicated Metrolinx and IO are trying to understand how best to procure the project. 
“There are benefits to having an integrated approach as you get consistency as an owner,” Cory said. “However on the other hand, the scale can be a problem and we are continuing to explore that question.” 

“How do you package signalling work, electrification and track expansion to ensure continuity of operations in a live corridor?” he added.

Cory added that market sounding will continue over the coming months with different market players as they try and find the right procurement strategy.

Deal uptick
Cory said that enabling works for projects currently in procurement such as Highway 427, Finch LRT, Hurontario LRT and the New Toronto Courthouse will result in an uptick in financial closes. 

“2014 was our busiest year and I think we are going to rival that,” he said.   

Government of Ontario Ministry major projects

Light Rail Transit projects

Competition and capacity
IO is also engaged as a procurement advisor to the City of Toronto and Ottawa on large civil projects such as Gardiner Expressway, Scarborough Subway and Ottawa’s LRT Stage 2, Cory said.

“Market capacity is something IO is constantly monitoring across design work, construction work and financing capacity.”  

Cory added that he expects that the enabling works projects and follow-on station projects could see a greater number of bids in civil procurements than in previous years trickle through to the social procurements. 

“We have a great pipeline of work that really helps bidders plan for the future and build up their resources and get the capability they need,” Cory said. “The RER is a huge civil works project with lots of structural work also, so there could be an interesting cross over in the players between the social and civil markets and aspire to lots of good competition.”   

Delays and procurement developments
Cory was resolute about the agencies processes, despite RFP deadline delays associated with Highway 427 and Finch LRT.  

“The process is designed to enable bid consortiums to come to us when seeing complexities in commercial or design elements of a project to request more time, [but] on the other hand, we do refine and finalize elements and scope of projects,” Cory said. “The value of an AFP project works when you get fixed scope.  We don’t want to close projects with uncertainty and pay for that down the road.”   

Cory noted the agency will also introduce a program around vendor performance in order to evaluate and incorporate current experience in live bids.  

“We’ll be rolling it out in 2017 and it’s not meant to be punitive or an overreaction to events but designed to analyze clear and measurable performance.”