Budget buster: Adelaide Street Rail Underpass price tag jumps $29.3-million

The cost of one of London’s most highly-anticipated mega projects has ballooned by 50 per cent over initial estimates.

In a report to city hall’s Civic Works Committee (CWC), administration explains that following detailed design and a tendering process, the project’s total cost has soared to $87.6-million, which is $29.3-million more than budgeted.

Council approved the four-lane underpass of the CP Rail tracks between Dundas and Oxford Streets for $58.3-million.

“We’ve seen a lot of economic turbulence, particularly with respect to construction, supply chain disruptions, labour shortages,” explains Doug MacRae, director of roads and transportation.

The procurement process received only three qualified bids, staff are recommending the lowest.

To date $22-million has already been spent on the project preparing to break ground.

Delaying the project to re-scope and launch a new tender process would jeopardize $11.1-million of federal funding that must be utilized by October 2027.

Civic administration recommends filling the $29.3-million budget gap as follows:

• $200,000 from London Hydro & Water/Wastewater
• $11.2 million from city hall’s Lifecycle Renewal Budget
• $8.4 million from additional debt
• $9.5 million from Development Charges

Resurfacing the expressway portion of Highbury Avenue will be pushed back three to five years, and road improvements of Southdale Road near Byron will also be delayed.

“We’re recommending to council that we postpone those by a few years to create the financial capacity to complete the Adelaide Rail Underpass,” adds MacRae.

The report to CWC states that the massive underestimation has prompted a deeper review at city hall, “The results of this tender have prompted administration to scrutinize existing project management processes to improve cost estimate reliability and budget alignment,” reads the report.

The shunting of trains back and forth across Adelaide Street has plagued commuters, emergency services, pedestrians and cyclists for decades.

At the time that the underpass project was approved, Adelaide was blocked between 11 and 30 times each day, stoppages averaging almost four and a half minutes.

The Civic Works Committee will discuss the new price tag for the underpass at a meeting on March 29 at city hall.