Economic slump paves way to lower bids for road work
Brent Wittmeier
Edmonton Journal
Friday, July 31, 2009
Can a worse economy pave the way to better roads?
It looks that way to Edmonton's transportation department. Tenders on 2009 road projects are coming in at 30 to 35 per cent below budget, leaving the city with an extra $8.5 million of wiggle room.
It's a significant chunk of change -- the annual roadway budget is approximately $30 million--and means the city can bump up plans to repave arterial and collector roads.
"It's very good news," said Brice Stephenson, manager of the city's transportation operations. Edmonton's six wards will each see at least one additional project this year.
"Each one of these projects were identified as work that was needed to be done in the next two years," Stephenson said.
The competitive bidding climate is a welcome respite from last year, when the city had difficulty luring bids away from private developers. This year's savings will pay off again next year, allowing the city to target other projects with its road-building budget.
Construction industry representatives say the additional work is a financial shot in the arm.
"This is a pleasant surprise for the contractors that do work for the city of Edmonton," said Heidi Harris, director of public affairs for the Alberta Road Builders and Heavy Construction Association.
Harris said road builders haven't been hit as hard as other sectors, but there has been a slowdown.
Grading and smoothing companies, typically associated with suburban development, are among the biggest casualties, while smaller companies have more difficulty in weathering the economic storm. Some companies have been forced to lay off up to 10 per cent of their seasonal workforce.
But the downturn has an upside. Harris said the "anomaly" of last year meant contractors were having difficulty attracting employees. The last year has essentially seen a market correction, meaning companies can be choosier when hiring and training their workers.
Investment in infrastructure during a slump can also play a role in economic recovery, Harris said. For every dollar spent on road construction, an estimated$5.60 is generated in local economic activity.
Coun. Tony Caterina is excited about improvements in Ward 3, where 137 Avenue will be repaved between 56 and 82 Street. He says now is the time for the city to chip away at its multibillion-dollar infrastructure deficit, particularly in 80 to 85 of the older neighbourhoods. The city has currently budgeted roughly $75 million for its neighbourhood renewal program.
"We've been so far behind in infrastructure repairs," Caterina said. "The more we can get done, the better." He said lower tenders also mean minimal increases to city taxes. Having multiple options means the city is better able to stay within budget and not go to taxpayers to make up shortfalls.
"There are a little sharper pencils putting the prices out," Caterina said. "This will help go a long way to making sure we come in with a very very reasonable tax rate for next year."
Other projects eyed by the city include work to 149th Street between 132nd and 137th Avenue, Yellowhead Trail between 130th and 149th streets, Belgravia Road, Saskatchewan Drive, 107th Avenue between Groat Road and 124th Street, 124th Street between 107th and 109th Avenue, Knottwood Road Loop, and Millwoods Road between 66th and 80th streets.
© The Edmonton Journal 2009
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