P3s’ focus on building lifecycle has important role for engineers

Public-private partnerships (P3s) are refocusing attention on the management of assets over an entire lifecycle. What form that attention will take was the topic of a panel held November 7 at the 21st annual conference of the Canadian Council for Public Private Partnerships in Toronto.

The panel was moderated by John Gamble, president of the Association of Consulting Engineering Companies (ACEC). “One of the real benefits of P3s and what makes them attractive is the focus on lifecycle discipline,” said Gamble.

Toni Rossi, a head of real estate management with Infrastructure Ontario, noted that the province’s aging infrastructure is supported by limited funds to keep them in shape. “We’re currently in discussions on the realty side on things like DRFM [design-renovate-finance-maintain] contracts,” said Rossi. Consortia that include consulting engineers could possibly take on such P3s, with multiple assets grouped by geographic area or asset type, she suggested.

Since the cost of maintaining a building over its lifecycle dwarfs its capital costs, pre-engineering is possibly the best answer to lifecycle asset management, said John Woodhouse of the Woodhouse Partnership, U.K. However, without the common language of standards such as ISO 55000, he said, the value of various engineering approaches can’t be adequately compared.

“Engineers have been doing lifecycle costing for decades, even before they knew what to call it,” said Gamble. “P3s under the right circumstances offer an opportunity where the lifecycle asset management formula comes back into the equation. It’s an indirect way for municipalities to amortize costs and to give themselves the latitude, by virtue of engaging a consortium, to spend smart now so they can spend less later. As members of such a consortium there’s an opportunity for consulting engineers to really strut their stuff and talk about innovative solutions.”

However, consulting engineers shouldn’t sell themselves short as members of a P3 consortium.

“With a P3,” Gamble said, “the owner is handing over the keys to the consortium and saying, ‘Bring my asset back in 25 years with no dents.’ If you’re talking about inventive ways to leverage life cycle innovation, then it’s in a consortium’s best interest to bring on good consulting engineers, give them some latitude to be innovative, and reward them for their innovation and for the risk they’re taking on.”

John Fleming, a vice-president with Johnson Controls’ energy solutions division, noted that the impact of new technology and software tools is a large driver of savings in P3 asset management. However, technology advances so quickly that consortium members must keep tabs on technological breakthroughs that occur between the design and building phases. “By the time we officially put them [the specified systems] into the building, it is usually after two or three upgrades,” he said.

On the insurance side, David Bowcott, a national director of large accounts in the construction and infrastructure division of Aon Reed Stenhouse, said that emerging world standards for lifecycle asset management are critical to accurately pricing insurance. Of particular interest, he noted, is the ISO 55000 Standard for Asset Management, which may be published as early as February 2014.

Peter Kenter is a freelance writer based in Toronto.