Thursday, August 06, 2009

The Johnson Street Bridge Replacement

The city of Victoria is proposing replacing the Johnson Street Bridge - aka the blue bridge soon, in fact in just under 20 months. I do not know where I sit on the idea of replacing the bridge, but the process seems to be suffering from some problems of how it is engaging with the public and the high financial risks it presents to the city of Victoria.

The bridge itself is now 85 years old and showing some effects of being that old, there is nothing indicating that the bridge needs to be replaced quickly, but certainly in the next years something needs to be done with the bridge. The biggest issue is that the bridge may not survive an earthquake. Frankly there many more important public buildings that should be sesmically upgraded before the bridge, the relative risk to human life is very low on the bridge versus somewhere like City Hall or the Crystal Pool.

This being Victoria, any change is being opposed by someone, there is a group of people opposed to getting rid of the bridge. I personally see no benefit in keeping the current bridge, it is an ugly eyesore on the inner harbour. The city would be much better off with the bridge being replaced with something architecturally interesting and harmonious with the inner harbour - not that I have any faith that any process would have us get a bridge that is something amazing.

Meanwhile Ross Crockford, Yule Heibel and Mat Wright have started a website to deal with the process the city is using (or not using) in relation to the bridge replacement. My biggest concerns are all related to the process in use to replace the bridge and the costs for the bridge.

Issues I have:
  • How do you come up with a cost for a new bridge if there is no design on the table yet?
  • Who will decide on the design of the bridge?
  • What is the impact of not having a bidding process to build the bridge?
  • Why is there no discussion of using a public private partnership in this case?
  • On what basis was MMM Group Limited engaged on the project? How many of their bridges have been built on time and on budget? This is the company that went 30% over budget on the Confederation Bridge.
  • Who will be on the hook if the project goes over time?
  • Who will be on the hook for cost over runs?
  • On the list of capital project priorities for the city, where is the bridge ranked?
  • Why now and why so quickly?
  • Given the short timeframes, is there not a large risk of not being finished by March 2011 and therefore leave the city on the hook for the whole bill?

The city has decided to go with a new bridge instead of refurbishing the current bridge. The cost estimates for the a new bridge has been put at $63 000 000, the cost to refurbish puts it at $25 000 000. As I understand it, the project is not to be a public/private partnership. Based on that fact alone, the costs to the public sector are at significant risk of rising a lot. If one looks at the sort of research done by people like Bent Flyvbjerg of Oxford, it is realistic to plan for a cost over run of 20-40% over the numbers in front of us at this time.

Since we have a dollar value assigned to the bridge but no design and we have a tight timeframe, this indicates to me that there is a very high risk of siginificant cost overruns. I would not be surprised if as construction begins the costs will rise. Based on what seems to be a lack of competive bidding process and the lack of detailed work up front on the site, I would expect that the final bridge cost to come in at between $80 000 000 and $100 000 000. I believe it would be better to to start thinking of this as a $100 000 000 bridge and be happy if it is cheaper at the end of the day, this would be the prudent way to think about it.

There is also a long history in public bridge construction of deadlines not being met. For the city to get the federal support they have applied for, they construction has to be complete by March 2011. The federal government has made it clear that this specific funding has to be spent on projects completed by March 2011, various cities have not applied for the money because they knew they could not complete on time. We have less than 20 months to that deadline and no design.

With no design, you do not know what equipment, people, and materials you need to build the bridge. Without knowing that, you can not plan for how long the bridge will take to build. I fail to see how you can propose a budget and then ask one company to design and build a bridge for that amount.

The city is talking about being able to start work in the water by November 2009 - this is less than 12 weeks away. This means that the bridge design has to be done in the next few weeks, realistically I would say you need to have the final design in place by Labour Day. The in water design will have to be commented on by the Department of Fisheries and Oceans - good luck in getting them to answer in a timely manner with no modifications.

If the city were to sign a contract that had firm deadlines and firm cost controls, I would be less concerned. A good contract from the city would have severe finacial penalities for delays in constructions and a guarantee that the price will not break $63 000 000. I doubt this is what will happen.

This bridge is the biggest capital project the city has ever undertaken that I know of. The cost of this bridge is compareable to the Yoho Bridge project on highway #1 in the Kicking Horse Canyon. The big difference, other than the scale of the projects as the Kicking Horse Canyon project was much bigger, is that the Kicking Horse Canyon bridge was built as a P3 and a great example of how well they work. Nothing in what I have read says the city is looking to a P3 to control costs.

I suspect that process will go ahead without any real input from the public and will leave the residents of the city with a bill of roughly $43 to $53 million as the residents of the city will have to foot all the cost overruns. There is a potential the city will have to cover the full $80 000 000 to $100 000 000 of the bridge if the March 2011 is not meant.

My final questions for the City Council:
  • Who came up with the $63 000 000 amount for the bridge? What is is based on?
  • When it becomes clear $63 000 000 will not be enough, will the city scrap the project?
  • If construction starts and the timelines can not be met, will the city abandon the project?
  • Will the city take concrete steps to ensure there is no liablity of more than $21 000 000 to the city of Victoria under any circumstance?
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