Canada’s approach to its high-speed rail project connecting Toronto to Québec City differs from similar initiatives, such as one in California, according to a new analysis.
The California project has faced significant delays, cost overruns, and criticism due to numerous changes.
Morningstar DBRS has published a commentary, “How the Progressive Public-Private Partnership Model Can Help Make Canadian High-Speed Rail a Reality,” highlighting Canada’s Alto rail project. The government opted for a “progressive” public-private partnership (PPP) model that officials hope will avoid the pitfalls plaguing other projects.
It is the largest infrastructure project in Canada’s history.
The PPP model, though time-consuming and costly, offers substantial benefits, the commentary said. During the co-development phase, potential risks are identified and mitigated, helping to lower risks to the construction and operating phases of complex projects like Alto. The approach aims to help keep the project on schedule and within budget.
“We consider the progressive PPP model to be a potentially superior approach in delivering large and complex projects with risks relatively new or significant to market participants,” Kevin Li, Morningstar DBRS senior vice president of corporate ratings, said in a release.
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