CSM 704-101 Alternative Project Delivery

MARKHAM AIRPORT PROPOSAL REPORT USING PPP

DBFOM MODEL.

SUBMITTED BY:
Gelareh Kazemiyan: 301091156
Hosna Dabaghi: 301045001
Kasra Sepehrdoust: 301013327
Nimish Khanal: 301087602
Marcelo Moreira: 301063649
Oleksandr Glimbovskyi: 300962017
 Table of Contents

1. Introduction…………………………………………………………………………..3

2. Airport Overview …………………………………………………………………... 5

3. A Conceptual Site Plan …………………………………………………………... 7

4. Economic Model …………………………………………………………………...12

5. Conclusion ………………………………………………………………………….15

6. Summary……………………………………………………………………………..15

7. Finalize………………………………………………………………………………..15

8. References……………………………………………………………………………16
1. INTRODUCTION:

Since the population growth rate is increasing in an alarming rate inside GTA, air traffic
demand is accelerating in the last few years. Planning studies have found that Toronto
Pearson International Airport needs an upgrade in facility size and performance
requirements very soon. The planning committee concluded that by 2027, a new airport
is a must to sustain the increase in demand. The Federal Government came up with
alternative site at Pickering but it was ruled out as environmental issues were raised.
However, Markham is proposed as the ideal location and through this assignment we
have made a proposal of a new airport at Markham.
Our P3 team has six members having their own area of specialization. We have chosen
DBFOM method for this project which is best suitable.

DBFOM Key players & Roles

1. Public Partner:
Public partner is responsible for the contract agreement with the private entity,
payment to the private partner at the end of the project, right to change the
works. In return to this, public partner would be getting bundled DBFOM service
from the private firm.
2. Private Entity:
Private Entity has the major role in the project. Private entity would have contract
and financial agreement with the public partners, lenders, investors and
contractors. In addition, private entity would be responsible for the relationship
building with stakeholders and shareholders along with the public partner.
3. Lender:
 Lender has a loan agreement with the private entity. Lender would provide debt
financing to the private entity.
4. Investor:
Private entity would have shareholder agreement with the equity investor in
which they would be getting dividends in return.
5. Construction Contractor:
Responsible for all the construction works and gets payment from the private
entity.
6. Operation & Maintenance Contractor:
Responsible for operation and maintenance of the project and gets payment from
the private entity.

DBFOM Project Delivery Method

Design-Build method of project delivery is widely used in PPP model of

construction project. In a typical design-build project, public owners have a legal
agreement with a contractor consisting of designers and consulting engineers as
a joint venture. According to the requirements of the owner; contractor and
designer under a single entity builds the project.

In a Design Build Finance Operate Maintain(DBFOM) P3, the public owner does
a contract agreement with a private partner also known as consortium or special
purpose vehicle or concessionaire. The private entity would provide the design,
construction, finance and life cycle maintenance/operation of the project. The
agreement duration is normally for 25 to 35 years or more. At the end of the
agreement, the public owner takes over the project/asset along with the
responsibility for its maintenance and operation.

The private entity or the consortium often includes the project and construction
management team with financiers. It directly engages the subcontractors and
other components associated with construction, operations and maintenance.

The private partner or entity is selected through a two-stage selection process.

The two stages are Request for Qualifications (RFQ) and Request for Proposals
(RFP) process. Owner sets out the output specifications, technical requirements
and performance criteria.

There is also included the condition of the asset at the end when it is taken over
by the owner in the contract/project agreement. Finance repayment is amortized
over the term of the project agreement.
 2. AIRPORT OVERVIEW
With an estimated population of 10 million by 2041, GTA is one of the largest
growing metropolitan regions in North America. Toronto Pearson Airport alone is
responsible for all the region’s air passengers. New air capacity is needed to
meet growing air traffic demand, even after extension plan for Pearson are
completed. Air Traffic passenger is expected to be doubled by 2040s in Southern
Ontario. As the maximum air capacity of Pearson Airport will be exceeded within
a few years, a new alternative airport is required to be constructed.

We have made a proposal for Markham Airport to meet the estimated demand of
30 million air passengers in Southern Ontario Region.

Key Performance Targets:

● 30 million air passengers
● 170,000 Air Carrier Aircraft movements
● 255,000 Tons of Air Cargo.
● 480,000 Civil Aviation Aircraft movements.

Airport Features:
● 50 Gate Terminals with Gross Area of 212,500 sqm.
● 2 Parallel primary runways with a length of 3050m separated by at least
1320m..
● `Supporting Taxiway System.
● Supporting Air navigation facilities
● 1 Cross wind runway with length of 2600m.
.
3. CONCEPTUAL SITE PLAN

3.0 A Conceptual Site Plan

This airport plan is developed according to the requirements specified in the specifics on the
indicated areas of the existing Markham airport. The configuration of the airport is based on
materials for the first model of Pickering Airport and modifications of terminal 3 of Pearson Airport.

The site plan is determined by the layout of the runway system that is placed taking into account the
land availability and minimal changes in existing infrastructure. According to the requirements of the
operational specification, it is necessary to spline the location of the three runways. Two parallel
primary runways with a length of 3050 meters, should have a minimum separation of 1320 meters,
and one runway of a crosswind with a length of 2600 meters. The location of the lanes and their
configuration will directly affect the position of the rest of the airport components such as terminal
and support structures.
3.1. Runway siting concepts

3.1. Runway Placement Concepts

The layout of the runways is based on the following concepts:

• Percentage of airport usability depending on prevailing wind patterns.

• Airport operational capability.

• The need to minimize physical impacts on the environment.

• Minimize noise in existing and planned residential areas near the site.

• The need to minimize runway crossings to maximize airport capacity.

• The need to minimize the distance between runways in order to reduce taxiing distances and require
extensive excavation The assessment of the total cost of construction is taken into account.

• Taxis are the distances between the terminal development area and the ends of the runways.
3.2. Facility development plan

After identifying more frequent wind directions and disposing of runways, all remaining main and
auxiliary objects must be planned around the runway, taking into account safe distances. . Planning
parameters have been developed for airport fixed assets required based on current and planned
conditions at individual Canadian and international airports. These parameters establish typical
scheduling relationships between traffic volumes and physical objects:

Based on the future need of 30 million Passengers, 170,000 aircraft of the airline, 480,000 aircraft of
civil aviation and 355,000 tons of cargo air transportation, the plan for the location of the objects is
as follows:

Passenger terminal building: 212,500 m2 building with 50 gates. The project is based on
modifications and partially modified on the basis of terminal 3 of the Toronto Pearson airport,
because of their similar capacity needs. The location of the terminal is located on the west side of the
airport area to provide a direct area from highway 48.
Air Navigation Services: The control tower is designed to fully service all three runways. Based on
the initial data regarding the number of passengers and the need for cargo transportation, the
following factors were calculated.

Aircraft maintenance: the required land area is 3.1 hectares, with direct access to the taxiway 4.1
hectares includes the area of the hangar track, and the rest - service parking.

General aviation: The total required area is 32.2 hectares, including:

• 15 ha for aircraft parking

• 7.2 ha for aircraft hangars

• 3.5 ha for parking

• 1.4 ha for auxiliary facilities.

Parking:

• Ground parking: it is located directly north of the passenger terminal area. The area will house 7650
sites.

• Five-level parking: located directly south of the passenger terminal area.

Cargo area: 19.75 ha air cargo facilities are located in the northwestern part of the airport, adjacent to
highway 48. The dimensions of this building are based on the utilization rate that will be needed to
meet the cargo requirement of 355,000 tons per year. per annum Near the cargo area is a warehouse
with an area of 3.2 hectares.

De-icing facilities: two de-icing zones were designed. The first one is located in the north of the
airport, near the parking lot and is closed to access highway 48. The second one, on the south side of
the Airport, is located next to the cargo area, in the immediate vicinity of highway 48.
4. ECONOMIC MODEL

The total investment is estimated about $3.97 billion, which the private sector representated by
the international CIBC company has financed 50%.
OPERATING ACTIVITY 1% INTEREST IN 10 YEARS

OPERATING ACTIVITY 3% INTEREST IN 15 YEARS

OPERATING ACTIVITY 5% INTEREST IN 20 YEARS
5. CONCLUSION

•In summary, This is a challenge project of the application of a Markham airport

variance delivery method –DBFOM , which through a consortium business will bring
feasibility to the Markham Airport by meeting the following requirements.

•Forecast of 30 million passengers per 20 year

•Construction completion in 3 years (from 2019 to 2022)

6. SUMMARY

•Full operation in 2022

•Two major players of the selected delivery method are Canada government and
international Pante management company. The total investment is estimated about
$3.97 billion, which the private sector represented by the international CIBC company
has financed 50% . For the investment recorded recovered was create 3 scenarios of
interest:

•1% paid in 10 years;

•2% paid in 15 years;

•5% paid in 20 years;

•During this time, the private investment expects to gain its revenues through
operating Markham airport relying on airline company s payment, such as landing
fees, general terminal changes, airport improvement fees, car parking, ground
transportation and concession rentals.

7. FINALIZE

•To finalize we recommended in order to prevent pessimistic scenarios is important to

review annually the cost basis for airport charges, the charges , the cost to be
allocated is the full cost of providing to airport and its essential ancillary service,
including appropriate amount for cost of capital and depreciation of asset, as well as
the costs of maintenance, operation, management and administration, consistent with
the form of economic oversight adopted, this cost maybe offset by non-aeronautical
revenues.
8. References

https://www.torontopearson.com/en

https://www.theglobeandmail.com/report-on-business/ontario-airports-must-
accommodate-traffic-growth-study-says/article34924867/

https://www.stantec.com/en/markets/civic-cultural/airports/airport-terminal-
design