Sierra Planning and Management Velodrome - Town of Milton

Sierra Planning & Management
56
56 Velodrome Business Plan – Town of Milton
Exhibit 27: Scale of Public Private Partnerships
The extent of the private sector involvement and therefore the degree of project risk transferred to the
private sector varies depending on the type of private sector partnership. In this first limited form, the
involvement of the private sector is in the provision of the design-build services whereby the design and
construction (not necessarily the financing) is undertaken by the private sector. Ownership and operation
of the facility when complete remains with the public sector. At the other end of the spectrum is full out
privatization whereby the private sector fully substitutes the public sector in the provision of the facility,
service or other activity under consideration. Between these two limits, lie a range of risk transfer
mechanisms which have proven valuable to a number of municipalities in the delivery of large scale, long
term capital facilities.
The reduction of risk to the public sector, including the Town of Milton as partner to the funding of the
development, results in capital cost increases over the base costs of construction and associated soft costs
(design, contingency, project management and other) to account for the adoption of project design and
construction risk by the private partner. The form of AFP in place for the Velodrome is the following:
� Design-build-finance (DBF) –a form of public private partnership or AFP whereby a municipal capital
facility is designed, constructed and financed to completion by the private sector on behalf of the
municipality or other public sector organization which has the use of the facility. Financing by the
proponent is limited to construction financing and all obligations for funding the capital cost of the
Business Plan | January 2012