Pension fund to control Quebec infrastructure projects
Caisse de dépôt et placement du Québec says it will pursue "vigorous competition"
In January Quebec’s construction industry was rocked when the Caisse de dépôt et placement du Québec announced that from now on it will be executing major infrastructure projects on behalf of the province.
The “Caisse” or CDPQ manages public pension plans in Quebec and has assets of around $214 billion.
On January 13 the fund announced its agreement with the province by which the government will identify major projects and hand them over to La Caisse for handling. As an independent public institution, La Caisse will become responsible for the projects from start to finish. It will do the planning, provide financing, control the tenders, develop, and operate the projects.
The first of two priority projects that La Caisse will undertake is a new transit line from downtown to the Montreal Trudeau International Airport and the West Island. The second is an LRT transit line on the new Champlain Bridge. Preparatory work on that bridge has begun.
The Caisse said that it will put every project to tender and “will encourage vigorous competition to control costs and access optimal solutions.” At the same time, it will execute projects according to global best practices and with “the highest standards of efficiency and transparency.” Any company bidding on a contract worth $5 million or more will have to be qualified by the Autorité des marchés financiers (AMF), the province’s financial regulator.
The government will “preserves its role as guardian of the public interest,” said the Caisse. The arrangement has to be ratified by the Quebec National Assembly.
The Caisse already has extensive experience and expertise in infrastructure development. In transportation, for example, it was a lead investor in the construction and operation of the Canada Line in Vancouver, and in the Heathrow Express in London, U.K.
The Caisse is the second largest pension fund in Canada, second only to the Canada Pension Plan.
Some commentators have suggested that the province has handed the oversight of infrastructure to La Caisse in the aftermath of the Charbonneau Inquiry as a way of ensuring that their construction is done with integrity.
In late January the Radio Canada show Enquête raised questions about whether the LRT on the Champlain Bridge will generate enough ridership to be financially viable. The radio producers said a Quebec Ministry of Transport study by experts had found that an earlier study had produced unrealistic and inflated ridership numbers.