Downtown BRT route over-budget as remaining routes face double-digit inflation
Inflation has driven the cost to build London’s first rapid transit route over budget and threatens to increase the price tag for the two remaining routes.
A new report to the Civic Works Committee (CWC) reveals building the $23.3 million Downtown Loop cost 1.7 per cent ($331,000) more than budgeted.
Cost overruns must be covered by the city.
“So far we’ve been really successful in limiting our budget exceedance to a small amount,” explains director of construction and infrastructure Jennie Dann. “But we know that the factors that are impacting the cost of these projects are not going away anytime soon.”
The report warns inflationary pressures are also anticipated to impact the more expensive East London Link and Wellington Gateway routes.
The budget approved five years ago did not anticipate construction costs to rise so quickly.
“Recent construction price escalations have been observed following approval of the EA (Shift BRT Environmental Assessment) cost estimates from 2018,” reads the CWC report.
Specifically, the 2018 Environmental Assessment estimated annual inflation at 2 per cent to 3 per cent, but Statistics Canada’s Construction Price Index is currently at 12.5 per cent.
In 2018, Dann responded to concerns raised by former mayoral candidate Paul Paolatto that the construction budget was overly optimistic:
At the time she wrote to CTV News, “to guard against cost overruns on this project, we have factored in a significant 50 per cent contingency fund— meaning we have done our financial planning in a way that ensures there are no surprises for Londoners.”
Dann now says a surge in construction costs of more than 30 per cent since 2018 couldn’t be anticipated.
“We made reasonable assumptions at the time, and so now we’re at a point where we’re trying to look at whatever options we can to refine our design and work with those pressures to find savings,” she says.
Cost pressures are impacting infrastructure projects across the city.
The cost to build the Adelaide Rail Underpass recently grew from $58 million to $88 million.
Earlier this week, city council supported a $10.2 million dollar adjustment to the city’s Capital Budget related to 18 smaller road projects.
Dann says the city continues to seek cost efficiencies as designs are finalized on the East London Link and Wellington Gateway.
The report also advises that additional funding might be sought in the 2024-27 multi-year budget this December.
“It’s really too early to tell,” adds Dann. “The team is using all of those same really great practices around value engineering and trying to find ways to tighten up the design for the cost savings.”
CTVNews.ca Top Stories
What is whooping cough and should Canadians be concerned as Europe declares outbreak?
There is currently a whooping cough epidemic in Europe, with 10 times as many cases compared to the previous two years. While an outbreak has not been declared nationwide in Canada, whooping cough is regularly detected in the country.
Ontario Provincial Police arrest 64 suspects in child sexual exploitation investigation
Ontario Provincial Police say 64 suspects are facing a combined 348 charges in connection with a series of child sexual exploitation investigations that spanned the province.
'Summer of discontent': Federal unions vow to fight new 3-day a week office mandate
Federal unions are launching legal challenges and encouraging public sector workers to file "tens of thousands" of grievances over the new mandate requiring federal workers to return to the office at least three days a week in the fall.
Watch fighter jet pilots pummel fake enemy ship off coast of Philippines
The United States and Philippines held annual joint-training drills just off the Southeast Asian nation’s western coast on Wednesday. Military forces sunk a 'mock' enemy warship – the BRP Lake Caliraya, which was a decommissioned tanker made in China.
'Ozempic babies': Reports of surprise pregnancies raise new questions about weight loss drugs
Numerous women have shared stories of 'Ozempic babies' on social media. But the joy some experience in discovering pregnancies may come with anxiety about the unknowns.
OPINION What King Charles' schedule being too 'full' to accommodate son suggests
Prince Harry, the Duke of Sussex, has made headlines with his recent arrival in the U.K., this time to celebrate all things Invictus. But upon the prince landing in the U.K., we have already had confirmation that King Charles III won't have time to see his youngest son during his brief visit.
'I killed four people': Trial hears video evidence of Jeremy Skibicki at Winnipeg trial
“I killed four people,” alleged serial killer Jeremy Skibicki told two homicide detectives during a recorded interview played as evidence in his trial Wednesday.
AstraZeneca says it will withdraw COVID-19 vaccine globally as demand dips
AstraZeneca said on Tuesday it had initiated the worldwide withdrawal of its COVID-19 vaccine due to a 'surplus of available updated vaccines' since the pandemic.
Seafood, eat food: Calgary Stampede releases Midway menu
The Calgary Stampede has released its menu of sweet, salty and spicy treats available on the Midway for the Greatest Outdoor Show on Earth.