December 17, 2015

Ernst & Young Reports P3 Saves $90 Million on New Saskatchewan Hospital North Battleford

The Saskatchewan Government today released the value for money (VFM) report for the publicly owned new Saskatchewan Hospital North Battleford project, which was prepared by Ernst & Young (EY).  The independent financial experts confirm the P3 model will save taxpayers $90 million, or 18 per cent, compared to a traditional model.  These savings include P3-related costs, such as private financing.

The new publicly owned and operated 284-bed facility will have 32 more beds than the existing hospital.  The facility will consist of 188 beds replacing the current 156-bed facility and 96 secure beds for male and female offenders living with mental health issues.  The two populations will remain separate, as will their programming and treatment.  This is an innovative approach for delivering mental health care and supports to two separate groups of people with significant psychiatric rehabilitation needs.

A total investment of $407 million is being made in the new facility including the cost of design, construction, finance, and more than 30 years of maintenance to ensure it remains in like-new condition.  EY’s report confirms the same project would have cost $497 million if it was delivered through a traditional approach. 

“Ernst & Young’s report is more evidence that governments should keep an open mind to P3s,” SaskBuilds Minister Gordon Wyant said.  “When one of the world's most reputable firms prepares a report showing $90 million in savings, that’s very meaningful.  It’s hard to argue against the hard work and advice of Ernst & Young.”

“As the MLA, what’s most meaningful to me is that construction will finish on schedule,” Environment Minister and Battlefords MLA Herb Cox said.  “The report confirms one big reason we chose a P3 – to make sure project risks, whether it’s bad weather or material shortages – won’t delay the opening.  Savings are important, but most of all, this project is about better care for patients.”

In summer 2015, Access Prairies Partnership (P3 team) started construction on the new facility.  The community can track the progress being made by viewing the construction site webcam online 24 hours a day, seven days a week.

The value for money report, redacted project agreement, Request for Qualifications, conformed Request for Proposal documents, and Fairness Advisor reports are posted on www.saskbuilds.ca.  This is in keeping with the province’s commitment to transparency by releasing procurement documents within 120 days of finalizing the project agreement.