Easter Weekend and PPP Meetings

Easter weekend 2009; beautiful weather here out west and have been taking advantage of it to get outside. Got the bike out and went for a long ride to Nose Hill Park yesterday. Got some great pics with the new camera of the mountains and downtown. Such an incredible vista; I wonder what the elevation is from the Bow river downtown; I fugire it must be at least 500-600 feetas it appears you are higher than either the Petro-Can tower or Bankers Hall. To the left are a sample of the pics.

Last week I attended a meeting of the Pan-Canadian group on alternative financing / public-private partnerships (PPP) in Edmonton. Was very informative inas much as we learned about how the turbulent financial markets are affecting the market for PPP and some specific projects such as the Port Mann bridge in BC and the Niagara Health Centre in Ontario. Their is a much reduced appetite for risk in the current market which is affecting both the willingness of financial institutions to lend and therefore driving up required returns (both for lending and the heightened need for equity). This is causing governments to have to essentially buy down the risk but putting larger contributions up front, of up to 50%. There is a general consensus however that this isn’t a bad thing, since the private partners have significant value at risk, such that the same benefits still accrue to the public client. Additionally there are more public dollars in the system for infrastructure today, and a greater willingness for governments to borrow directly to “stimulate” the economy, so this is not the problem it might have been a few years ago.

In my capacity with the City, I was kind of a “fly on the wall”, taking in the discussion and lessons learned. The City is slowly moving forward to evaluate projects, working with key departments such as transportation and community services. There is a generally positive feeling that in developing business cases, some projects could move forward and obtain further support when value for money could be demonstrated on commercial terms.

In other City and economic news, I was not surprised to see that the official announcment came from the developer of my building (where thank gawd I rent!) Torode has suspended contruction on the second tower. I have not seen this in my lifetime: mothballing 20% complete towers because of a toxic combination of collapsing sales and skyrocketing financing costs. There are now up to eight under-construction but mothballed condo projects in central Calgary. How the City will address these eye-sores if the economy does not improve will be interesting to see!

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