Contracting Approach

A PPP Project

To carry out such a large-scale project, the Government of Québec deemed it suitable to opt for a public-private partnership (PPP). This approach offers the guarantees that the government was seeking to ensure construction cost control and efficient equipment management until 2038.

What is a PPP?

A PPP is a long-term contract concluded between a ministry and a partner from the private sector to acquire a range of services, for instance. In the present contract, the responsibilities incumbent upon each partner are clearly identified.

Partnership Agreement

For a period of 29 years, the government will be bound by contract to Groupe immobilier Ovation for the use of the concert hall. At the end of this period, the government (Place des Arts) will become the owner of the hall.

The contract, of a total value of $259 million, includes a first instalment from the Government of Québec to Groupe immobilier Ovation once construction work is over in 2011 and when the OSM is able to use the concert hall.

Subsequent payments will be cut down from the overall amount to be disbursed yearly by the Government of Québec for the 27 following years, thus reducing the overall sum to be funded over the long term.

Documents related to the partnership agreement are available on the Website of Infrastructure Québec.

Responsibility of Groupe immobilier Ovation

Groupe immobilier Ovation is to ensure the design, construction, funding, operations and maintenance of the future concert hall.

Groupe immobilier Ovation has met the criteria identified ( 5 Mb, 341 p.) by the Government of Québec and all the provisions required.

Responsibility of the Government

During the project, the government will remain responsible for any required authorization. Once construction is finished, the OSM and PdA will be in charge of co-managing the hall, as well as artistic programming and business activity management.

Benefits of a PPP Approach

In terms of technology

Calling upon the expertise of the consortium headed by SNC-Lavalin to undertake the construction project of the new concert hall is based on the willingness to provide the community with the best quality in terms of proven work methods, innovative technologies and effective modes of operation.

In terms of project scheduling

In a conventional contract, a major project is usually carried out in several stages – design, completion and operation – and the government assumes the responsibility for each of them. In a PPP, entrusting a single private partner with all the stages of a project implies a very thorough analysis to ensure all elements are planned down to the last detail, from construction costs to operation and maintenance costs. Hence, a project schedule becomes the central element of the contract for the private partner, who might be penalized if the schedule is not followed accordingly.

In terms of risk sharing

Unlike a conventional contract, in which the government assumes responsibility for all the stages of a project, in a PPP, responsibility is shared with the private partner who takes on the responsibility for potential design errors detected during the construction stage. To this effect, see the table Highlights of the Partnership Agreement.

• Rapport d'analyse de la valeur ajoutée ( 1.8 Mb, 22 p.)