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market under stress. The market has also
faced pressure from two recent contractor
insolvencies that impacted several large P3
projects. In one recent example, EllisDon
was working with construction giant Carillion
Canada Holdings on four hospital projects
in the services phase when Carillion went
into insolvency.
"We had to work very hard to demonstrate
to the hospitals and the project lenders that
we were willing and able to take over the
operations on our own," says Durán. "We
worked with the project lenders to waive
satisfy a deficit, although he echoes the
sentiment that many contractors are backing
out of the P3 space as a result of dealing with
risks that are too challenging to manage.
"What we will see in 2020 is a continued
discussion between stakeholders to find the
optimal balance to make these projects
something that contractors can bid on while
also being sustainable and achieving the
value-for-money objective that we want to
achieve," says Platteel.
The number of disputes over material
claims has risen in recent years, putting the
contractual defaults triggered by the Carillion
insolvency by demonstrating that we had a
viable plan to take over the operations fully."
Through the transaction, EllisDon acquired 70
per cent of the shares of the four hospital
services companies from Carillion, making
EllisDon the sole owner.
"That case demonstrated how the P3 model
can work very well because none of the
contracts were terminated and we were able
to take over from Carillion within the structure
of the P3 contractual framework," says Durán.
The project remains successful.
