January 29, 2008 / 10:06 PM / in 10 years

Alberta plots C$120 bln in infrastructure spending

(Adds details, quotes)

By Jeffrey Jones

CALGARY, Alberta, Jan 29 (Reuters) - Alberta’s government laid out a C$120 billion ($120 billion) plan on Tuesday to build up highways, railways, hospitals, schools and low-income housing to cope with a booming economy and population growth in Canada’s biggest oil-producing province.

Under its 20-year "strategic capital plan" -- which comes before an expected election call -- the government of Conservative Premier Ed Stelmach said it aims to beef up infrastructure in the province of 3.3 million people at an estimated cost of C$6 billion a year.

The government has been criticized for insufficient planning amid an unprecedented rush to develop Alberta’s oil sands, which rival Saudi Arabia’s oil resources in size but are far more expensive to develop.

That development boom has stretched provincial infrastructure and public services thin and prompted high inflation in housing costs.

Stelmach rejected the notion that the strategy is just preelection campaigning, stressing that he had promised a long-term infrastructure strategy when he took over from Ralph Klein as premier in late 2006.

"We have a plan. It’s here. It tells you ... how decisions will be made with respect to building new infrastructure and (gives) the decision-making tools," he told reporters.

"We know, based on all forecasts, that Alberta -- it sounds like an island of security on the North American continent, so we’re going to have people moving here continuously."

Last week, he released a 40-year climate-change strategy that has attracted scorn from environmental groups. That plan will allow carbon emissions to rise for more than a decade before they begin to fall.

On Monday, he defended it by saying the oil sands would have to grind to a halt for emissions to fall before then.

The infrastructure strategy includes plans to construct new roads and expand heavily used highways such as the one from Edmonton to the oil sands hub of Fort McMurray.

It also detailed plans to upgrade its rail links to the United States in efforts to aid exporters.

The government said little about the much-discussed concept of high-speed passenger rail service between the major cities of Edmonton and Calgary apart from investigating and planning for "passenger rail options that provide commuter-type services."

Stelmach said one of the first tasks on the file will be to acquire a right-of-way before land values surge even more.

Alberta will have to then determine the size of population it will need before embarking on such a project, he said.

The two-decade plan includes major projects at several hospitals and clinics throughout Alberta, where the population has been projected to increase to 5 million by 2028.

The government will start by spending C$300 million to add 600 new long-term care beds.

In addition, the strategy includes expansions of universities, colleges, technical schools as well as affordable housing projects.

($1=$1.00 Canadian) (Reporting by Jeffrey Jones; Editing by Peter Galloway)

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