Steel Delay

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There was a delay in late 2010 in getting steel (from Structal-Bridges of Quebec) needed for constructing trusses, which was to be completed before the ice went out in spring 2011. The delay caused the estimated completion of the decking to move into a period (October-November) which would not allow for concrete and other weather-sensitive decking work to be done. This work will have to wait until spring 2012, pushing the estimated opening date to November 2012.

Cost of delay

It is unknown what the total cost of this delay will be. While the direct construction costs of the delay will likely be borne by the contractor or their suppliers, there are other costs in delaying the opening date, and it is uncertain whether the GNWT will have to cover them. A major cost would be the loss of tolls from the November 2011 date until the bridge actually opens. Let's try and estimate that, assuming an arbitrary July 1, 2012 opening date:

  • The entire 2012 mine resupply on the ice road will be missed. At 2011 traffic levels, that's close to $2 million in lost tolls. Assume half the non-mine traffic tolls (January through June) are lost, and that's another million, for $3 million.
  • Assuming the GNWT's $3 million/year figure for ferry and ice road costs, having to continue these through half of 2012 is another $1.5 million. Since the ferry season would be shortened, that might be an overestimate. However, there would be the full cost of the ice bridge, and some of the ferry costs (like pre-launch overhaul) are probably fixed instead of proportional. There would also be the operational costs from Nov-Dec 2011.

So there could be at least a $4.5 million consequence to the delay that some combination of the contractor, supplier or GNWT is going to be making up. Some of that perhaps might come from the contingency built into the $182 million construction budget, but I can't imagine there will be much left of that.

One small savings is that the $200,000 Opportunities Grant is paid April 1 for 35 years after the bridge is open. Since the bridge likely won't have opened by that date in 2012, the government will save $200,000 in 2012, and have to pay it in 2047, when inflation will have reduced its value considerably.

Extra $10 million

In December 2011, an additional $10 million was allocated to the bridge construction budget. While much of this was likely due to the delay, some of it might have been necessary anyhow to cover additional costs even if the bridge had opened on in 2011. Also, it is quite likely that this doesn't include the shortfall in tolls mentioned above that would have gone to bond payments.

Another extra $10 million

Another $10 million overrun was announced in June 2012, to ensure timely completion and provide a settlement of all claims with the contractor. It is unclear how much much of the time pressure was caused by the steel delay, and how much by other factors.