Terri-Jane Yuzda

Banff and Jasper Opt for the P3 Treatment

Wastewater Plants Save Costs, Improve Efficiencies Through Private-Public Partnerships


Freelance Writer

The July 1 that Bill Berzins, P.Eng., spent in Banff in 2001 is etched in the Earth Tech vice-president's memory. But unlike thousands of visitors enjoying a Canada Day getaway, Mr. Berzins was "deeply immersed" in something other than the typical mountain experience - he worked in the bowels of the picturesque town's wastewater treatment plant.

That's because it just happened to be day one of a 10-year contract the Town of Banff had signed with Earth Tech Ltd. to upgrade and operate the municipality's wastewater treatment facility. With responsibilities for Earth Tech water, wastewater and composting operations in Western North America, the Calgary engineer increasingly works with Canadian and U.S. governments within private-public partnerships, or P3s, to design, build and then operate public facilities.

Banff's initiative was the first P3 venture in Alberta for Earth Tech (formerly Reid Crowther). Built in 1988, the Banff plant had an average design capacity of 14 million litres a day and a peak design flow of 25.5 million l/d. The average flow was sufficient, but heavy seasonal demand and spikes generated by the hospitality industry meant the plant needed more peak capacity.

· Having governments turn to the private sector to design and build projects (or to run them when built) isn't new. For hundreds of years and in thousands of cases, governments have granted private investors concessions to construct and then operate roads, canals, waterworks and other infrastructure. In fact Canada's dream of a national railway system, the CPR, was a public-private partnership of sorts

· While projects now labeled P3 once were more ad hoc, lately many governments have more actively soliciting private partners to design, build, finance and operate infrastructure to meet public needs. Organizations such as the 10-year-old Canadian Council for Public-Private Partnerships have become clearing houses and advocates of P3

· The oft-touted benefit of P3 is the easing of pressures on cash-strapped governments. But P3 promises benefits through innovation and efficiency as well, plus advantages associated with the assembly of expertise and the management of risk

· Canada's prominent P3 initiatives include the Confederation Bridge and Ontario's Highway 407. Overseas, the Chunnel rail link connecting England and France, though not without difficulties, is an example of a P3 project. Brazil has some 60 P3-type highway toll-booth and other highway concessions

· Canada isn't necessarily a P3 trailblazer. Nor is Alberta, despite government outsourcing, and privatizing of liquor outlets and some medical procedures. Yet some Alberta P3 projects, notably Canmore's water and wastewater system run under a 10-year contract with EPCOR Water Services Inc., have gained national recognition

· Alberta's healthy economy may even hold back P3. Jonathan Huggett, P.Eng., and his B.C. firm J.R. Huggett Co., have advised on the Canmore and more than 100 other P3 deals in Western Canada. "If there's lots of money around, there is less incentive to go the P3 route," he says.

Banff contracted out wastewater treatment at its plant from 1990 to 2000. But the town faced more stringent Alberta effluent regulations and wanted to achieve environmental leadership standards set by Parks Canada. So the town and its director of environmental services, Steven Gasser, P.Eng., began searching for solutions.

The search led to the hiring of Associated Engineering Alberta Ltd. to generate performance criteria and a shortlist of candidates for a DBO contract - companies capable of designing, building and then operating the plant.

Earth Tech which was awarded the contract, it will double the plant's peak design flow to 50 million l/d by spring. Upgrades include improved upfront screening, added parallel treatment capacity created by more biological aeration, and backend enhancements (added ultraviolet treatment and sand filters). A year-round composter is a further feature. The province and the federal government are financing more than half the $11 million in upgrades.

Ten-Year Commitment

Under the agreement, Earth Tech will run the plant for the next decade. As a result, says Mr. Berzins, the town is spared "detailed day-to-day management of the operation. Its role is to do the due diligence to confirm that we have met the performance criteria established by the owner."

Earth Tech bears responsibility for most plant operational costs over the duration of the contract. That, Mr. Berzins notes, creates a powerful incentive for his firm to select the right equipment and design.

Spring Completion in Jasper
Up the Icefields Parkway in Jasper, Earth Tech last May assumed operation of a far more basic wastewater treatment facility, consisting of four aerated ponds. It will soon be replaced, however.

With Maple-Reinders, also the contractor at Banff, Earth Tech is designing and building Jasper's new biological nutrient removal process. Run under a 10-year contract, the $10-million plant, when finished this spring, will have a 7.5-million l/d capacity.

Planning for that plant began on Park's Canada's watch, then received a green light once Jasper attained municipal status in June 2001. Jonathan Huggett, P.Eng., a P3 expert from Surrey, B.C., helped structure the proposal. Veteran Jasper engineer John Ogilvy, P.Eng., also provided valuable input and is serving as the town's on-site engineering representative.

In Jasper, as it does in Banff, Earth Tech receives a fixed operating fee. Innovative combined treatment units have lowered costs by reducing concrete and steel requirements.

Unlike Banff's linear system, Jasper will use a combined bioreactor and secondary clarifier. "By combining them in concentric tanks," says Mr. Berzins, "we were able to achieve much of the cost savings."

Under the current approach, the municipality has saved more than 25 per cent from the costs in an earlier design/build proposal submitted to Parks Canada, says Keith Shepherd, Jasper's acting environmental services director.

Risk Premiums Eliminated
Further savings accrue from design, construction and operation occurring within one package. Among these savings, Mr. Berzins notes, are those that stem from the elimination of "risk premiums" factored into traditional delivery methods. Individual designers, builders and owner/operators use risk premiums to safeguard against less-than-optimal choices made by others in the project delivery chain.

With designer and operator rolled into one, there's added incentive to optimize operations and minimize long-term costs. Even when Earth Tech takes over an existing operation, new eyes, backed by wide experience, promise economies and improvements.

Certainly Jasper and Banff benefit from Earth Tech's experience gained through its 180 varied North American P3 ventures. For example, since August 2001, Earth Tech has operated the City of Edmonton's composter, and in late October began talks with the City of Calgary to operate the composter there as well.

If necessary, Earth Tech will take P3 a step further and arrange financing. For instance, under a 20-year contract it will design, build, operate - and finance - a $17-million US, 9.5-million litre-per-day, reverse-osmosis plant to treat a quarter of Beverly Hills' water. Earth Tech will be paid per acre-foot of water supplied. The contract also includes a clause to lease the city a 30,000-square-foot building to house the California community's water administration.

Drawing on Expertise
Unlike municipalities with a single plant or limited resources, Earth Tech, with some 9,000 employees worldwide, can readily tap into technology, innovation and expertise. That helps the plant operations personnel and municipal officials.

Events in Walkerton, Ont., and elsewhere have heightened the importance of officials doing their homework and carrying out due diligence. Officials still must establish expected standards for facilities, but P3 relieves administrators of much of the second-guessing about whether they're spending enough on maintenance, upgrading and staff training.

However, Steven Gasser is adamant that P3 projects do not let him or the municipality off the hook. With just one staff engineer in Banff, an alliance with Earth Tech "brings a depth of engineering expertise that a municipality like ours just doesn't have."

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