Falling interest rates and the right to buy the proponent out of a contract have prompted Winnipeg city staff to recommend that the city purchase the contract for a P3 police station for Cdn $15.6 million.

A staff report that is expected to be approved by city council said that falling interest rates since the DBFOM contract with Shelter Canadian Properties Ltd. was approved last year have rendered the value for money negative by Cdn $2.3 million (net present value) over the 30-year term. The city has the option of buying Shelter out on Nov. 30 when the South District Police Station, now 60% complete, is scheduled to be finished.

With the repurchase, the total city NPV cost is Cdn $32.7 million, versus Cdn $35 million for the P3.