Fairfax Financial moves in on Stanton hospital project
A Toronto-based insurance company could operate the new Stanton Territorial Hospital, if a purchasing deal with the company originally selected to do the job goes through by the end of March.
Fairfax Financial Holdings Limited announced in a news release Feb. 5 it has agreed to take over Carillion's "services business" in Canada — such as managing airport, defence and healthcare facilities.
The N.W.T.'s finance minister says the new hospital in Yellowknife falls under that deal.
"There is an interested buyer for Carillion," said Robert C. McLeod, who described Fairfax as a reputable company with billions of dollars in revenue and assets.
"We're hoping the deal goes through fairly quick … and work will continue on the Stanton renewal project as the discussions are going. It has no effect on that."
Last month, Carillion Canada's U.K. parent company announced it was going into liquidation, leaving Carillion Canada to file for creditor protection as a result.
The company had agreed to maintain and operate the new Stanton Territorial Hospital for a 30-year period following the building's completion this November. It's part of a P3 — or public-private partnership — with the territorial government, in which private sector partners take on the majority of financial risk, according to the territorial government's website.
McLeod said Fairfax will take on the responsibility of operations and maintenance if the purchasing deal goes through, adding that it's not expected to cause any interruptions to the project.
"I'm extremely confident that things are going to work out," said McLeod. "We're still looking at the November [2018] completion date, as was originally intended. So I don't think there's much of an impact at all, and the hospital will be ready to go."
He added it's his understanding that Fairfax is trying to keep the same senior management team from Carillion in place, "which will add some continuity onto the project."
'I think there's still some risk'
However, some are skeptical about the deal.
Frame Lake MLA Kevin O'Reilly said Fairfax still has hoops to jump through in order to complete the purchase.
A news release from Fairfax states the deal has to be approved by the Ontario Superior Court of Justice and could close by the end of March.
"I'm not convinced that we're scot-free at this point," said O'Reilly. "I think there's still some risk for our government."
He also questioned the value of P3 projects and whether the government will save money in the end.
"I think the jury's probably still out on that one," he said. "I remain to be convinced that P3s are the best way to build large infrastructure projects."
