Wednesday, March 14, 2012

Blue Bridge costs green

Cost issues getting a thorough airing on facebook, and I'm still working on longer piece for my website, but in the meantime the issues around the bridge are breaking fast.  Here's my latest letter to Victoria city council on the project,   It's getting more difficult with cost pressures, but it is still the right project.

Mayor and Council
City of Victoria

Please endorse the recommendations of your staff and approve the new budget for the Johnson St. Bridge project.   I appreciate that the additional costs are a concern for council and the community but believe your staff report details where costs are ramping up and a sound rationale for moving forward.

Not all costs appear to be new.  Some appear to be changes in accounting for the project that fold in sunk costs and work conducted to support of council’s decision in advance of the referendum.  At that point, voters made a clear choice in favour of a new bridge.  Other costs are clearly outside of your control and many would apply to any project design.

It is clear from current work on decommissioning the rail bridge that refurbishment was never a feasible option and emphasizes that major capital projects sometimes face uncertainties or necessitate scope changes that add costs but at the same time protect critical infrastructure and costly city assets.

None of the new scope changes fundamentally alter the project presented to voters in the referendum.  Relocation of Telus lines reduces risks that could disrupt service and expose the city to more costly claims.  Improving fenders for the navigation channel not only protects the bridge asset, but provides some comfort for Point Hope Shipyards as they plan for an expansion that will bring jobs and new tax revenue to the city.  I expect that investment, at the very least, to return net benefits to Victoria that should be welcomed. 

It appears to me also, that the additional works to protect Telus lines and build support foundations for the harbour pathway are new cost drivers that were outside of the scope of the original project.  Adding those costs to the project budget makes sense for construction staging, but I do not believe that it was anticipated when the city sought voter assent for borrowing.  In that sense, like some of the other costs, it is not an inflationary pressure, but rather a sensible and responsible addition to the project scope that delivers more value and better efficiency to the construction project the city will undertake.

None of these features significantly alter the fundamental scope of the project or the proposal presented to the electorate in the city’s referendum for the borrowing authority.  The fact that the city’s financial commitment is unchanged should confirm that a new referendum is unnecessary.

Returning to the drawing board to add rail or make significant changes to other amenities or systems design would as likely add more delay, more costs and require voter assent to endorse those major scope changes explicitly excluded from the project charter at the time of the referendum.

Finally, I believe it would betray the interests of Victoria’s citizens, our businesses, our visitors and future generations if you were to direct staff to revisit the bridge design in a vain effort to find minimal savings by degrading the architectural expression of the bridge.  Your report suggests that the costs associated with the architectural integrity of the chosen design are less than $1 million – far below the exaggerated numbers suggested by those who believe they can find windfall savings.  For the most part, form follows function.   Please do not build a monument to mediocrity to straddle our Inner Harbour.

I appreciate that you face a difficult decision, but the new bridge is still the right decision, and moving forward the best way to protect the city against further cost pressures.  We need a bridge, it needs to meet the functional needs of an integrated, diverse and evolving transportation system and it must complement the unique beauty of Victoria’s natural and built environments.  Thank you for your consideration.

John Luton, Executive Director
Capital Bike and Walk

No comments:

Post a Comment