Three in Five Podcast

Episode 4: Three PPP questions for John

Steve sits down with John Vincent, Senior Managing Director and Head of Project Finance at SLC Management, to discuss public private partnerships and how they might fit into the Biden administration’s infrastructure plan.

Steve Peacher: Hi everybody thanks for tuning in again. I'm Steve Peacher President of SLC Management, and this is “Three in Five,” in which we asked three relevant questions to our experts across the SLC Management platform. And today I’m joined by John Vincent who heads our project finance team within SLC Management. John, thanks for joining.

John Vincent: Hi Steve, thanks very much for inviting me.

Steve Peacher: Canada has had a lot of success over the years building infrastructure through public private partnerships, could you give our audience a quick description of what a PPP is, why it's worked so well there, and why PPPs have been a bit less prevalent in the U.S.?

John Vincent: Sure, quickly – in Canada and there's various forms of public private partnerships, but effectively it's a method of procuring new infrastructure, often government related, where the private sector gets involved in designing, building, operating and maintaining a facility for typically a fixed period of time and then it's handed back to the to the government for future use.

Steve Peacher: You know you've been, as I know personally, you guys are very active. What are some examples of the kinds of PPPs that you’re getting involved in?

John Vincent: Sure, so you know just going back to your last question We certainly have had a pretty vibrant programming in Canada and a lot of that has to do with the procurement agencies that have been set up, and also the structure, as I mentioned, of the of the PPPs, where there's a fairly standard form and it's allowed for a consistency and also a template that has been rolled out across the country. So, they’ve developed a pipeline of transactions in each of the procurement agencies and they go ahead and they publish that pipeline, so people know what's coming along. And with that and people will invest resources in the sector and because it's such, like building infrastructure requires a lot of commitment. So across Canada we've been involved in a lot of, you know, probably half my portfolio which is about CA$14 billion now, is associated with infrastructure, including P3s. And you know some of the things we've built across Canada – probably dozens of hospitals and, obviously, you know a really important asset class for the country and the environment we're in today. And that moved also into what we call horizontal – so horizontal infrastructure, things like LRTs and transit. So it's been very successful program.

Steve Peacher: In the U.S., the Biden administration, of course, has proposed a large infrastructure plan. And do you think that that will lead to more P3s in the U.S., if so, in any particular areas? And if not, why not?

John Vincent: Well, I do think will and they may not be called P3, but there's certainly partnerships with the private sector. If you think of the sorts of things that needs to happen, in not just the U.S. but around the world, it’s electrification of transit, communications, all these all these things require a lot of infrastructure. It's not necessary traditional roads and bridges, which is going to be core infrastructure that has been done, and will be done. But these things are fundamental to the new economy. And you'll see, I believe you'll see with that focus on transit you're going to see knockoff projects. You’re going to see things like broadband roll out, because you need that that communications infrastructure for newer vehicles in the transit. It's such a data driven society and you need to move electricity around so you're going to see transmission, and all these new sectors that are evolving require the pirate private sectors expertise to facilitate. You'll see different structures than in Canada, I think, it’s a much more innovative environment, to be honest in the U.S. and you'll see the people tapping into ways to access capital in the markets through revenue streams. So, for instance in the in the broadband rollout that could be down a, you know, a highway easement. You're going to see commercialization of that sort of facility that benefits both the public sector in their communications and in the private sector as well, so really leveraging off private capital.

Steve Peacher: Well, I know your team is chomping at the bit to get involved in some of these new projects so hopefully they, you know, they transpire as you're talking about. One final question John, it's been a tough year for everybody, and I know that in Canada they're still in various stages of lockdown. So, my question is: what have you done over the last year to maintain some sanity during these crazy times?

John Vincent: Yeah, you know for me it's really important I need to do things physically, that challenge me and you know it's like every day I try to do something physical. But the thing that stands out in my mind, I was able to sneak off for a few days of skiing out in the Rockies this year and to be able to take your mindset and focus on physical exhaustion rather than mental exhaustion is incredibly refreshing for me and really helped me kind of gear up for the next phase of things.

Steve Peacher: Yeah I got up to the mountains too a bit, and it was a good place to socially distance coming down a ski slope, so that was nice. Well listen, thanks for joining John, appreciate your insights and thanks to everyone for tuning in to this episode of “Three in Five.”

John Vincent: You’re welcome, thank you.

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