Use of public-private partnership expected to save $35M on outpatients site

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The public-private partnership construction of a new outpatients facility in Bayers Lake will save Nova Scotia $35.4 million compared to a traditional build, according to a document released Wednesday.

Officials with the Transportation and Infrastructure Renewal Department tabled the value-for-money assessment at the beginning of a meeting of the legislature's public accounts committee.

The document says an evaluation of the project with EllisDon Infrastructure Healthcare will produce better value mainly because risk is being transferred to the private company.

Gary Porter, senior director of procurement and finance for Nova Scotia Lands, said the transfer of risk "more than offsets" higher administrative costs that come from using a public-private partnership.

As part of the study, 32 different projects in the last 20 years were examined for things such as whether they were on time, on budget or required design changes along the way.

"What we found was, on average, when we do projects ourselves there's about a little better than a 12 per cent increase in cost, mostly resulting from the fact that we own the risk for the design and construction," Porter told reporters following the meeting.

Project covers workers' needs

Now that a contract is signed and construction is about to begin on the outpatients facility, the province would only need to pay for design changes that it ordered.

The facility is part of a massive health-care redevelopment program that includes the closure of the Victoria General Hospital and expansion of the Halifax Infirmary. It will include collaborative health care; diagnostic, dialysis and geriatric services; mental health and wellness services; and rehabilitation services.

Wednesday's meeting also focused on an auditor general's report from July that highlighted the need for project master plans and the functional needs of staff to align.

Dr. Alex Mitchell, senior medical director for the QEII new generation project, said the needs of frontline workers have been factored into the design work throughout the process and people seem happy with where things have landed.

"We took the things that we asked for and we asked the market to solve a bunch of our problems. And what we ended up with was a building that was actually more efficient, had everything in it that we asked for at a very affordable price that we are going to be absolutely thrilled with," he told the committee.

How COVID factored into planning

The building will also be able to accommodate needs related to COVID-19 or any other health-related event that might emerge, said Mitchell.

Although planning was almost complete by the time the pandemic arrived in Nova Scotia, Mitchell said officials had the experience of having gone through similar events in the past, albeit on smaller scales.

"SARS [and] H1N1 gave everybody a real good scare a while back and that gave a scare to the architects, the planners, the kind of people who think about hospital construction," he said.

Officials said a similar report would be released for the Halifax Infirmary project once a contract is signed next year.

Wednesday was the first time the public, including MLAs, got to see the Bayers Lake value-for-money assessment — something that didn't sit well with opposition MLAs.

Opposition expresses concern

"That's a classic tactic I've seen before," Progressive Conservative MLA Tim Halman told reporters.

Halman said the decision not to give committee members time with the document ahead of the meeting amounted to the government doing its "bare minimum due diligence."

New Democrat MLA Susan Leblanc called the move disrespectful to committee members.

She noted people have been asking for more details about the projects for some time and questioned the government's assertion that value-for-money reports cannot be released prior to the bidding process being completed.

"There's all kinds of things that we don't know about why those cost savings are there," she said. "I'm really concerned about that."

Substantial completion of the outpatient clinic is scheduled for August 2023.

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