What are the key strategic priorities for Plenary Group over the coming year or so?
MM: In 2013, we are focused on growth. Our Canadian business continues to build on our strong track record of social infrastructure projects and we are rapidly expanding into a number of new sectors, such as services, water/wastewater, transportation and transit. The healthy pipeline of public-private partnership (PPP; P3) projects has also led us to expand into new provincial/state, territorial and municipal markets, beyond the traditional P3 strongholds of BC, Alberta and Ontario in Canada and New South Wales and Victoria in Australia.
2012 saw our Australian team secure significant strategic equity alliances with Canada’s CDPQ and Australia’s Palisade Investment Partners. One of our most significant priorities for 2013 has been to successfully launch our US business. We have invested heavily in building our presence and strategic partnerships in that market, and we are pleased with the early results. Earlier this spring, we announced the official launch of Plenary Group USA and appointment of Dale E. Bonner, California’s former Secretary of Business, Transportation and Housing, as its inaugural chairman.
You’re very active in the Canadian and Australian markets. What opportunities and challenges do you see in those two markets?
MM: The Canadian and Australian markets are two of the most mature P3 markets in the world. Since we were early participants in both markets and have closed about a dozen P3s in each one, we have a strong advantage in understanding the procurement evaluation criteria, standard contracts and risk management requirements during the concession term.
We have also spent a lot of time building best-in-class partnerships with the leaders in finance, construction, design, facilities management and system operations, to enable us to meet and exceed our clients’ expectations.
The major challenge for both markets is to maintain an active and steady pipeline of projects to bid. 2012 was a quiet year in both markets but 2013 is very busy, especially in Canada and the US. We are focused on making sure we understand the needs of clients in our new markets, in order to continue to build on our track record of success.
What hopes do you have for the US, based on experiences so far?
MM: The US market holds a lot of opportunity for us. The pipeline is developing quickly and we believe we are well positioned and partnered to capitalise on it. The key is to understand that it’s not one market – it’s a bunch of markets, each with their own requirements. The sheer size of the markets, the need for new infrastructure and the widespread reliance on toll revenues for economic infrastructure bode well for the sustainability of a pipeline in the US.
In terms of projects, we are currently working to close the US 36 road project in Colorado, and we are pre-qualified on the Puerto Rico Correctional Facility project.
What would you say is the biggest task today in putting together a successful consortium to bid for assets and deliver them?
MM: As we move into new markets and infrastructure classes, choosing the right partners remains one of the most important aspects of our business. P3s are long-term commitments, which require our consortia to consistently deliver for 20 to 50 years and, as a result, reliable partners are paramount.
The other major consideration for building consortia, especially with new partners, is the risk allocation that we see in P3s. It is substantially different than what you would see in a design-bid-build or construction management procurement approach. As a result, we typically begin the conversation about risk allocation early on.