The coronavirus pandemic could compress financial metrics of Canadian infrastructure public-private partnership (P3) projects currently in operation as a result of new safety standards, reduced operating efficiencies and increased social-distancing measures, said Fitch Ratings. Increased “out of contract” operating and lifecycle costs resulting from these measures could materially reduce margins in projects operating under fixed-priced contracts, which may negatively affect credit quality.
Canadian provinces have used the public-private partnership model for the last 15 years to deliver more than 100 major infrastructure projects. To date, the P3 fixed-price model has proven resilient in responding to changes in requirements. Most availability-payment projects have been operating for more than 10 years and have performed in line with expectations with minimal performance or availability deductions.
Uncertainty and lack of visibility with respect to the length and s
