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
Pedestrian, baby injured after stroller struck and dragged by vehicle in Squamish, B.C.
Police say a baby and a pedestrian suffered non-life-threatening injuries after a vehicle struck a baby stroller and dragged it for two blocks before stopping in Squamish, B.C.
Demonstrators kicked out of Ontario legislature for disruption after failed keffiyeh vote
A group of demonstrators were kicked out of the legislature after a second NDP motion calling for unanimous consent to reverse a ban on the keffiyeh failed to pass.
Tom Mulcair: Park littered with trash after 'pilot project' is perfect symbol of Trudeau governance
Former NDP leader Tom Mulcair says that what's happening now in a trash-littered federal park in Quebec is a perfect metaphor for how the Trudeau government runs things.
RCMP uncovers alleged plot by 2 Montreal men to illegally sell drones, equipment to Libya
The RCMP says it has uncovered a plot by two men in Montreal to sell Chinese drones and military equipment to Libya illegally.
Government agrees to US$138.7M settlement over FBI's botching of Larry Nassar assault allegations
The U.S. Justice Department announced a US$138.7 million settlement Tuesday with more than 100 people who accused the FBI of grossly mishandling allegations of sexual assault against Larry Nassar in 2015 and 2016, a critical time gap that allowed the sports doctor to continue to prey on victims before his arrest.
Man wanted in connection with deadly shooting in Toronto tops list of most wanted fugitives in Canada
A 35-year-old man wanted in connection with the murder of Toronto resident 29-year-old Sharmar Powell-Flowers nine months ago has topped the list of the BOLO program’s 25 most wanted fugitives across Canada, police announced Tuesday.
Doctors ask Liberal government to reconsider capital gains tax change
The Canadian Medical Association is asking the federal government to reconsider its proposed changes to capital gains taxation, arguing it will affect doctors' retirement savings.
Pro-Palestinian protests roiling U.S. colleges escalate with arrests, new encampments and closures
The student protests of Israel's war with Hamas that have been creating friction at U.S. universities escalated Tuesday as new encampments sprouted and some colleges encouraged students to stay home and learn online, after dozens of arrests across the country.
Tabloid publisher says he pledged to be Trump campaign's 'eyes and ears' during 2016 race
A veteran tabloid publisher testified Tuesday that he pledged to be Donald Trump 's 'eyes and ears' during his 2016 presidential campaign, recounting how he promised the then-candidate that he would help suppress stories that had the potential to harm the Republican's election bid.