The city of Regina in Saskatchewan, Canada is evaluating the use of a public-private partnership (PPP) to finance the construction of a C$150 million (€115 million; $147 million) wastewater treatment plant expansion, sources close to the matter told Infrastructure Investor.
Stricter federal and provincial laws pertaining to environmental standards for such facilities are still taking shape, but the city expects to have clarity on the financing model in the next six months.
The project involves the expansion of an existing wastewater treatment plant in Regina, but its brownfield nature is contributing to the uncertainty surrounding a PPP.
“There is some question as to how we may be able to make a PPP work as it relates to the maintenance component,” the source said. “It’s basically adding onto an existing plant and it’s hard to distinguish between the maintenance of the existing facility and the new one.”
If pursued, the expansion would comprise one of the largest projects the city has ever undertaken. In addition to private capital, the city would likely apply for funding from the $1.3 billion P3 Canada Fund; a state-backed vehicle that supports infrastructure projects in the country.
Another factor that must be decided is whether or not the operations component of the wastewater treatment plant would be integrated into the PPP. “Typically, the operations component is also part of the PPP. Before we go down that road, that is something that must be evaluated,” according to the source.
The city of Regina is nearing the commencement of a separate PPP for a $450 million sports stadium, a project for which a market sounding process unfolded that elicited responses from 19 North American and European firms interested in participating in the potential PPP.
Sources said that as the city ponders the use of a PPP to procure the wastewater project, city officials are similarly considering testing the market ahead of a tender launch.