Some Quick Facts out of the new Class C Estimate - inflation and financing factored out:
- Cost to build a new bridge with no rail link - $66 million
- Cost to build a new bridge with the rail link - $77.3 million
- Cost to refurbish the bridge with the rail link - $86.9 million (this means building a separate bike/pedestrian bridge for $22.3 million)
- Cost to refurbish with no rail link - $66. million
When we add inflation/cost escalation and financing,:
- New bridge with rail link - $89 million
- New bridge with no rail link - $77 million
- Refurbished bridge with rail link - $103 million
- Refurbished bridge with no rail link - $78 million
Comparing December 2008 Class C estimate with the May 2010 Class C Estimate
The previous Class C estimate was $63 million to replace the bridge, but I was always been uncomfortable with that number. The previous estimate and the new of $89 million were compared in the presentation to council this week. The presentation blames $19 million of the $26 million dollar increase on the delay, I do not think this is reasonable and see the two estimates as being done differently.
The current estimate has a contingency that is costed out at a higher percentage of the project, a smart idea. If this had been applied in first estimate, that would have added another $4 million to the cost. The engineering costs in the first estimate were costed out at 7.5% of construction costs, now they cost it at 12%. If we raise the first one to 12%, this raises the first estimate to $8 million for engineering. The current estimate has a $1 million for land, the previous one had $0.
The current estimate has $6.9 for the escalation of costs over the time of the project. The first estimate assumed zero cost increase. If one applies the same escalation, another $5 is added into the project.
The current estimate has a financing cost of $4 million, the first estimate had no costs for financing. I do not know what it would have been, but I am going with a $3 million number.
When one makes the two estimates comparable, the first estimate should have been $80 million, not $63 million.
Looking at details of refurbishing the bridge
The headline number for this option is $103 million and this sounds like a large number, much bigger than replacement costs. There are some reasons for this.
The $103 million option calls for a new bridge to be built next to the existing bridge for bike and pedestrian traffic. This bridge has a cost of $26.7 million all in, $22.3 million without escalation and financing.
The refurbishment option has a higher project percentage costs for contingency, engineering and escalation, these costs are 38% of the refurbishment of the actual bridge versus 30% of the costs of the replacement bridge. I do not necessarily have a problem with this difference as there could be many more surprises in refurbishment than replacement. I point it out to show that the uncertainty about this approach adds about $17.5 million to the project costs in the class C estimate stage versus the new bridge.
Refurbishing the bridge would also lead to traffic problems as some or all of the lanes of the bridge would have to closed, depending on how you proceed. The economic impact of this from the study done by Banjar Management Inc estimates a loss in sales of 0.2% to 1.0% for downtown businesses. For transit users the value of their lost time would be about $0.25 per person per trip. The increased travel time for people in cars if the bridge is fully closed for a year works out to about $25 per car, or about $0.08 per trip.
No Rail Option
If the city goes forward with no rail link in either case, the total cost is almost identical at $77 and $78 million respectively. To me it would seem to make the most sense to go forward with one of these options. The City would have to borrow around $56 million in either case
Will I vote in favour?
I am not thrilled that people in the City of Victoria will be expected to pay for all of the cost of the bridge that is more important to Esquimalt than the vast majority of people in the City of Victoria. Esquimalt should offer to cover 20% of the costs of the bridge as an act of regional good faith. I am 100% certain this will not happen because acting in a parochial manner is the norm for the majority of councils in this region.
If the no rail option is chosen I am likely to vote in favour of either replacement or refurbishment. If the rail aspect is retained I can not support the extra expense for something that is never going to be used and has no benefit for the City of Victoria. The rail aspect costs need to be covered 100% by the Island Corridor foundation and not the City.
3 comments:
Thanks for the analysis, Bernard. Too bad the media relies on the city's press releases to report the "news" - it reminds me a bit of what Salim Jiwa talked about recently at a Victoria Social Media Club meeting (my account here). Jiwa described reporting as devolving to news by press release - not a good situation.
I'm a big supporter of rail but even I think spending that sort of $$ on bringing trains just that small distance from the roundhouse is crazy.
Oddly in all of the rhetoric surrounding this matter none of it has actually dealt with the real problem which is how did we get here?
Were the warning flags down and council refused to act creating the problem or did the city engineer leave it too late before raising the warning.
In business someone would have been fired so that this did not come up again but I have heard of no such action being taken.
The bridge could be repaired, note, repaired for probably less than 10 million according to the original report so why not do that?
I know, you believe that there is such a problem with earthquakes and yet bridges up and down the coast are about the same and they are not getting money thrown at them, why?
Because someone looked at the risk potential and made a value decision that went like this, if the bridge was full of traffic how many people would die? My guess is maybe 10.
Are there other issues that need attention?
Victoria has three underground streams running through downtown and soil liquification is a much greater threat. The city hall was upgraded but it will hit the deck due to the above along with half of city core.
The belief in pilings is misplaced since there is no support around the piling in an earthquake and the pilings buckle like drinking straws, witness the last quake in San Fransisco.
Traffic lanes?
How about the corner at (insert street of your choice) or that section of road on (insert street name) or how about the (???????)?
The real problem is that following any of the present plans is like giving a child a new toy to replace the one it just destroyed in a fit of pique. And then one to replace it and then........
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