A $10-million increase to the Capital Regional District’s sewage treatment project is being recommended for approval by CRD sewage committee members.
The increase, if approved by the CRD board, will bring the total projected cost to $775 million — a 1.3 per cent increase over the originally approved $765 million.
Project officials say an over-heated construction market driving up labour and material costs is primarily responsible for higher costs.
“We are not happy to be here today delivering this message to the committee, not happy at all,” said project director Dave Clancy. “But you’ve got our commitment that we’ll continue to work in the same fashion that we always have and look for ways to mitigate costs to the overall project until it’s completed.”
“I have confidence in this team,” said Victoria Mayor Lisa Helps, committee vice-chair, after hearing presentations from officials, including Clancy, deputy director Elizabeth Scott and project board chairman Don Fairbairn.
Helps said the committee didn’t have the “wiggle room” not to approve the increase. “I think if we don’t approve this today we send the exact wrong signal, which is we don’t want to complete this project. We do want to complete this project.”
CRD chairman Colin Plant said the project board signaled concerns about cost escalations back in January and then contracted two consultants to look at the project scope and expenditures.
“So we’ve reached the place where we have a project that’s gone 1.3 per cent over budget,” Plant said. “I think that’s the more important number than the actual hyperbolic $10 million, because $10 million is a lot of money. And it is a lot of money but in the scale of $765 million it is 1.3 per cent,” he said.
Clancy told the committee that contracts for the conveyance system — the pipes and pumps — have all come in over budget by a total of $56 million, forcing the board to dig into the project’s $69 million contingency.
Only Victoria Coun. Ben Isitt voted against recommending the budget increase.
Isitt noted that there was still $13 million left in the project contingency. Not approving the budget increase “would hopefully help apply pressure to look at savings,” he said.
But Fairbairn said the project team “cannot work any harder or any more diligently on behalf of the taxpayers than they already are,” and that a decision not to approve the budget increase would, rather than being an incentive, have a negative impact.
The CRD committee was told that the independent board overseeing the project has decided not to undertake upgrades to three sections of the existing sewage system — at a cost saving of $20 million.
The project team said work to extend 1.3 kilometres of a pipe known as the Trent forcemain in Fairfield should be completed. However, upgrades to the Currie Pump Station and twinning of a forcemain and a gravity sewer will be cut.
The projects, identified in 2003, were designed to take excess wet-weather flows to Clover Point, where they could be discharged out of the long outfall, rather than through a number of shorter overflows in Oak Bay.
But reduced water consumption due to the replacement of old water fixtures and appliances, a change in public habits and building codes over the past 15 years means the upgrades are no longer necessary.
“There is no value to building those components, neither today nor in the future,” Scott said.
If the project were constructed as originally planned, the total cost would be $795 million, about 3.9 per cent over budget.
Because federal and provincial contributions are capped, local taxpayers will have to cover the increase.