The Mattagami Water Plant is six-million dollars over budget, not 20-million. That’s according to Timmins Mayor Steve Black, who is trying to clear up the misconception. The grant application to the provincial and federal governments said the project would cost 60-million, but this was done under a short deadline with no detailed engineering. After being properly assessed, it was found the project would cost almost 74-million. A budget of 77-million was approved. Issues arose during construction, raising the cost to 80-million. Black says the city is taking legal action to recover some of those costs. The matter is still ongoing, and will come before city council tonight.
Read the Mayor’s full statement breaking down the costs below:
One of the hot topics in our community for the last couple years has been the construction of the Mattagami Water Pollution Control Plant. It is my intention to clear up a lot of the misconception and false statements being made in regards to this project.
The project was initiated in April of 2009 after a meeting between the Provincial Minister and Mayor, where the mayor was encouraged to apply for a provincial grant for the project as Timmins was one of 11 communities which did not have the upgraded plant. Time remaining for grant applications was limited to approximately one week. As such the city filed a grant application based on an estimate with no detailed engineering. This was not the start of construction for the project or an award of the contract. The estimated cost of the new plant was $59.5 Million, and the city received $19.8 from both the provincial and federal governments.
It is important to note this is almost 40 million dollars we would not have received if council did not take the advice of the minister to apply for the grant and instead refused to do the project. I can’t confirm whether we would have been ordered to do the project, or not, but with so few communities left without this type of plant I would say in my opinion it is likely
Following the grant application detailed engineering work began and continued for 2 years on the project. Detailed engineering was completed by June of 2012 and the first projected cost of the plant following detailed engineering work was $73.9 million dollars. (not the $60 Million that was estimated for grant funding). This included construction of the new plant, engineering costs and a contingency of 5.4% for the project.
The project bids were received and the city awarded the contract to North American Construction (NAC) in July of 2012. The contract was $64.4 Million to NAC for construction, $5.3 Million to Genivar for Engineering and Project Management. Following this staff recommended council increase the contingency to 10% which was more standard for this size of project. The total budgeted envelope (prior to construction starting) was now $76.7 Million following this approval.
Between Oct 2012 and May 2013 bedrock problems were encountered. The contractor did not hit bedrock where expected as per the geotechnical report. The project was delayed and construction plans revised including some additional infrastructure requirements.
The project resumed in May of 2013. The resulting delays and additional infrastructure requirements caused the price to escalate from $76.7 Million to the current $80.6 Million budgetary envelope. It should be noted the city has initiated legal action to recover costs from the delays as a result of the error with respect to bedrock conditions. This matter is ongoing.
It is expected with cost recovery from the legal action and remaining contingency that the project will come in under the $80.6 Million currently budgeted.
For more details please watch the December 15th city council meeting at 6pm as a presentation will be made which explains the details above.
Please do not hesitate to come in and see me if you have any questions.
Mayor Steve Black