Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/1365049
www.canadianlawyermag.com/inhouse 31 Concern about risk transfer during the procurement phase of infrastructure projects is top of mind for Mark Platteel, general counsel at ACS Infrastructure Canada Inc. "We're trying to figure out a way with procurement authorities to protect ourselves and share the risk of COVID and ensure that we're not assuming risks that we can't control," says Platteel. Many players in the infrastructure development industry have expressed concern about the allocation of risk between public and private sectors, causing some companies to leave the P3 market entirely. While the problem has not been fully resolved, some progress has been made. "The procuring authorities are clearly trying to be responsive to feedback from the industry that the risk transfer in the P3 model has become problematic," says Platteel. "I think there's a view that risk elimination is better than risk allocation, so there has been a desire to try to find ways to eliminate risk because some risks are very challenging to allocate." Durán agrees that there have been notable improvements in certain areas, although he says the P3 model is still in a state of flux. "There has been some very meaningful effort on the government agency side to listen to the market, but we're still looking for some fundamental changes in risk transfer," says Durán. Changes to contract models have presented further challenges to in-house counsel in the infrastructure industry in recent months, with the exploration of alternative delivery models. In particular, the introduction of the alliance contract model has been a big development, as it was used by Metrolinx and Infrastructure Ontario in the recent Union Station enhancement project. Under the alliance model, parties work collaboratively and assume less of the risk. "The jury is still out on whether that model will be a success in Canada, but it's certainly indicative of a reflection of procuring authori- ties trying to be responsive to concerns raised by the private sector," says Platteel. Industry experts regard the future with a mix of optimism and uncertainty. "There is a strong sense that infrastructure development will be a very important part of government stimulus programs so we're working to get past COVID and be in a position to participate in a meaningful way when that happens," says Durán. Wallace remains cautious. "We don't yet know what the pent-up demand is going to be as we exit from the pandemic. We don't yet know what the government stimulus will look like. We don't yet know if vaccine rollouts will proceed on intended timelines, and we don't know what the impact of the variants will be." Despite the uncertainties, Wallace says there is room to be optimistic that we are heading into a more stable future. "The contracting community are very entrepreneurial, highly adaptive folks who figured out the new normal of construction very quickly," says Bruce Reynolds, a partner at Singleton Urquhart Reynolds Vogel LLP. "So long as construction continues to be consid- ered essential, the industry will thrive." "There has been some very meaningful effort on the government agency side to listen to the market, but we're still looking for some fundamental changes in risk transfer." Andrés Durán, EllisDon Group