Caisse’s infrastructure plan courts controversy over tendering process

theglobeandmail.com
Nov. 25, 2015
By Bertrand Marotte

The Caisse de depot et placement du Quebec’s bold foray into the world of infrastructure development is hitting snags, with concerns being raised over the tendering process for transit projects.

Quebec’s giant pension fund manager in January trumpeted a deal struck with Premier Philippe Couillard’s government that will see the Caisse quarterback future infrastructure projects, leveraging its $240-billion in assets to plan, finance, build and run public works of all kinds. The idea is that the Caisse shifts its role from mere investor to operator and owner, boosting its investments in hard assets while the government unloads the cost of project financing from its balance sheet.

But the new model, with an initial phase involving two Montreal-area mass transit projects, is running into controversy in its early stages.

The Caisse recently launched a new subsidiary called CDPQ Infra. Preliminary assessment work has begun on the transit initiatives, whose combined development costs are estimated to be in the $5-billion range: a light-rail corridor on Montreal’s new Champlain Bridge to the South Shore of the St. Lawrence River and a commuter rail link through Montreal’s West Island connecting the downtown to Trudeau International Airport.

One local transportation consultancy firm agreed to participate in a preselection phase at the invitation of CDPQ Infra last month, said the head of the firm, who spoke on condition he not be named.

The firm was then invited to make a detailed proposal for a study of ridership potential on the Champlain Bridge LRT but was told it had only three days to do so, the source said. The usual lead time for such undertakings is two to three weeks, he said.

The consultancy quickly concluded it could not produce an acceptable proposal in so short a time frame and decided to withdraw from the process, according to the source.

Such an apparent rush on the part of CDPQ Infra to get a proposal on the table could lead one to conclude that CDPQ Infra had already made its choice and was only going through the motions of a bidding contest, he said.

The company ultimately selected to conduct both ridership studies is British outfit Steer Davies Gleave.

The would-be supplier of services, who has years of experience making submissions on high-profile projects, had “rarely seen such tight deadlines. This lacks seriousness for a project of this size,” he said.

The Caisse strongly denies there have been any irregularities in the process and says it followed widely accepted industry standards.

“This allegation is factually and categorically false, in addition to being insulting,” Caisse spokesman Maxime Chagnon said in an e-mail.

All participating firms had “double the time referred to” in the allegations and all those that submitted a proposal did so within that time frame, he said.

The deadline for making a bid was “normal given the size and nature of the mandate.”

A second source close to procurement decision making at CDPQ Infra said that preliminary calls for expressions of interest for the provision of ridership studies for the two transit projects allowed too many firms without the required experience to submit proposals.

“Companies that had no business submitting were allowed to,” said the individual, who also spoke on condition he not be named. “The selection criteria were way too broad.”

When asked about the number of companies initially expressing an interest, Mr. Chagnon at first said there were 14. But in a follow-up interview, he said there were actually 23. In the end, five companies filed proposals, which resulted in a short list of three, Mr. Chagnon said.

Such a large number is unheard of in public bidding processes at this level, said the second source, who also has extensive experience in procurement on large-projects of this nature.

The Caisse, which promised full transparency and openness when it struck the infrastructure deal with the government, refuses to divulge the names of the 23 firms in the ridership-studies bidding process.

Christian Dube, executive vice-president for Quebec at the Caisse, said CDPQ Infra is making good progress on development plans for the Montreal-area mass transit projects.

Major Montreal projects

The Caisse de depot et placement du Quebec subsidiary, CDPQ Infra, has begun preliminary assessment work on two public-transit initiatives: a light-rail corridor on Montreal’s new Champlain Bridge and a commuter rail link through Montreal’s West Island, which together represent a $5-billion investment. Each system will be designed and implemented in compliance with sustainable-development principles.

Champlain Bridge An electric automated public-transit corridor for the replacement bridge connecting Montreal to the South Shore of the St. Lawrence River – one of Canada’s busiest bridges.

Daily usage: Estimated at 90,000 daily commutes by 2021

Length: 15 kilometres

Stations: Seven to eight stations, plus two terminals

To West Island: An electric public-transit system linking downtown Montreal to the West Island and Trudeau International Airport.

Saved emissions: Expected decrease of between 70 million and 80 million kilometres of car journeys in the project area

Length: As much as 28 kilometres

Stations: Five stations, plus three terminals