Advice on a new commercial operation – major infrastructure project – establishment of greenfield organisation

The Client

The Chief Executive of a new Government owned enterprise in British Columbia formed to manage a $3b highway and bridge reconstruction project and to establish and operate a commercial tolling business.

This would be the Government’s first commercial tolling operation. The project required a clear focus on enabling the objectives of the government to implement a commercially viable tolling business within a broader public sector operating and governance environment.

The Brief

The executive team had limited experience in establishing and operating tolling on a commercial basis and therefore sought external expertise in forming the business.

Our consultant worked as a member of a small advisory team with an engagement spanning two years providing the following scope of consulting services: assistance in the development of requirements briefs and conduct of tendering processes for commercial partners for the operation of the tollway, review of key contractual documents, advice on financial models and charging structures for the new tolling business, assessment of human resource needs and organisational structure, and assistance in developing a policy and compliance framework for the new commercial business.

Our Response

Our consultant worked with the CEO and executive team members to clarify government objectives in establishing a commercial tolling business, to identify opportunities to drive commercial outcomes, and to consider the parameters, constraints and risks associated with introducing user pays tolling of a public road for the first time in the Province.
Key issues were identified and assessed through a series of workshops and meetings with the executive team. These informed detailed work to develop arrangements for contracting with commercial partners, the establishment of a new organisational structure, and the introduction of a financial structure with supporting rationale that was consistent with Government policy parameters.

The work involved close consultation with executives, developing and reviewing user requirements briefs and tender submissions, advising on contractual documents, reviewing financial modelling, and assisting in preparing briefs to government on the appointment of key contractual partners and user pricing structures.

Our consultant made recommendations regarding human resource needs and organisational structure for the new commercial tolling entity. This was informed by organisational input, analysis and the consultant’s knowledge and experience of comparable operations.

The Results

Informed by our consultant’s advice and recommendations the client adopted a financial structure including road user charging, established an organisational structure and resourcing for the new tolling business, and successfully contracted with key commercial partners to operate tolling and revenue collection systems.