We are faced with a Johnson Street Bridge replacement that started out at $64 million, then increased to $77 million, and has now hit almost $93 million.
And as the costs have escalated, what the citizens get for their money has shrunk. First to go was the rail connection. Next, the length of the span was reduced. Now, we learn that the iconic “walk through the wheel” pedestrian way, which was prominent in the referendum campaign, has been dropped. And, up to now, the bridge consultants have avoided answering exactly what load the bridge is designed to carry.
Council had little choice but to accept the cost overruns and allow staff to send the project out to three preliminary tenders.
The question is, what happens in June if the tender responses come back with still more cost increases? What happens if tenders come in at $110 million, $125 million, or worse, $150 million? Or, what happens if the bids come back with further reductions in the project itself — in the design life, the load-carrying capacity, the earthquake tolerance, etc? Because there still is lots of uncertainty: the design and geotechnical work hasn’t been completed.
Council have been given assurances that costs won’t escalate further. However, they and the public were given these assurances in the past, only to be proven wrong time and time again — which is not a surprise, when you consider that this “iconic” style of lift bridge has not been built before.
I maintain that council and the taxpayers, who are bearing all the risk in this project, cannot afford to be in the same predicament in June when the tenders come back. The City needs to develop a backup plan now as a matter of foresight and prudent management. Council is exposing citizens to far too much financial risk.
I encourage council to start developing and discussing such a backup plan now. It should be done by a qualified, independent third-party engineering and contracting expert. And it should answer some key questions:
- Where are the risks in the design and in the proposed contract terms?
- Will this contract end up being “cost-plus” and the taxpayers footing the bill for overruns?
- Could a less iconic bridge significantly reduce costs or risks?
- What would the cost be to disengage from the contract with the existing bridge designers?
- What is the likelihood that the federal contribution agreement could be extended?
Such a backup plan will cost money to develop. However, can council and the City afford not to invest the money, and risk finding itself in an intolerable situation in 90 days — with its back to the wall, and no option but to press on regardless? A backup plan would also send a message to the project team, designers, and contractors, that the City will not accept any further risk — either of increased cost, or of a decreased project.
— Paul Brown
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