Alternative Financing and Procurement Backgrounder

 
Light rail vehicle
An artist’s rendering of the Eglinton Crosstown light rail vehicle.
Union-Pearson Express construction
Union-Pearson Express construction.
Union-Pearson Express construction
Union-Pearson Express construction.
Canada Line light rail transit in Vancouver
Canada Line light rail transit vehicle in Vancouver.

Metrolinx is building the Eglinton Crosstown, a $5.3 billion investment from the Government of Ontario to expand transit in Toronto.

The Crosstown will be delivered by Metrolinx, together with Infrastructure Ontario, using the Alternative Financing and Procurement (AFP) model.

All provincially funded projects greater than $50 million are subject to consideration for AFP, as set out in the Ontario government’s long-term infrastructure plan, Building Together.

Under AFP, the public sector establishes the scope and purpose of the project, while the construction work is financed and carried out by the private sector. In some cases, the private sector participant will also be responsible for the maintenance of the infrastructure asset. Metrolinx will retain control and ownership over the project assets.

AFP makes the best use of private sector resources and expertise to provide on-budget and on-time project delivery. If the project runs over budget, the private sector pays. If the project falls behind schedule, the private sector pays. The risks of the numerous and complicated interfaces are transferred to the party best equipped to manage those risks.

AFP projects undergo a value-for-money analysis, that is, the AFP approach is compared to the traditional procurement approach to ensure value for money. Moreover, all AFP projects are open to an independent, third-party review by the Auditor General.

The AFP model is a well-established way of financing and procuring large public infrastructure projects in Ontario and has become the new standard for delivering large-scale projects.

Since 2006, the AFP program has brought more than $23 billion in capital projects to market. AFP is used for projects such as the GO East Rail Maintenance Facility, the Canada Line in Vancouver, the Ottawa light rail transit, the Waterloo light rail transit, and the UP (Union-Pearson) Express procurements.

Please visit Infrastructure Ontario’s website for more information.

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