Ontario Pension Board wins C$247m prison PPP

The C$16 billion pension and Forum Equity Partners have won a 30-year concession to build South West Detention Centre in Ontario. The project is backed by availability payments from the provincial government.

A consortium including Forum Equity Partners and the Ontario Pension Board has signed a C$247 million (€177.5 million; $257 million) contract to construct, finance and maintain a 315-bed maximum security prison near Windsor, Ontario, the province’s infrastructure authority said in a statement.

The Ontario Pension Board, a C$16 billion pension plan with over 40,000 members, and Toronto-based infrastructure developer Forum Equity Partners will provide equity for the project, called the South West Detention Centre. The 30-year concession for the project is backed by annual availability payments from the provincial government.

Canadian bank CIBC, the Bell Canada Enterprises' pension fund, and insurer Canada Life will provide long-term debt financing for the project, according to the statement. Construction will begin this summer and should be completed by fall 2013.

The neighbouring province of Québec is also pushing ahead with a public-private partnership for a prison facility. Infrastructure Québec, the province's infrastructure development body, shortlisted three consortia headed by Macquarie Group, SNC-Lavalin and Fiera Axium for a contract to construct a 300-bed prison in southern Québec. That project is estimated to cost C$143 million.

Ontario Pension Board has no specific allocation for infrastructure, according to its 2009 letter to members. The pension allocates 13.4 percent of its portfolio to real estate, 45 percent to equities, and 24 percent to US, Canada and international fixed income investments, according to the letter.

Brookfield Financial advised the winning bidders on the project.