Twice as expensive and twice as long
There’s a pattern with big municipal projects – they tend to work out as twice as expensive and take twice as long as first projected. Listed here are the sewage ozonation plant, two composting plants, and the Bellechasse bus garage, plus the recently reopened city hall. The article considers others as well.
Isn’t the central problem a tendency to underestimate the scope and cost at the start, in order to get it accepted? Maybe we could stop doing that?
mare 11:36 on 2024-06-18 Permalink
If it was twice as expensive and still was finished at the same date that would be suspicious. Twice as expensive and finished much earlier is possible (weather, hiring extra staff, using faster but more expensive production methods), and taking twice as long and being much more expensive is actually not so strange. There’s always feature creep and setbacks, and you have to pay workers for all the extra time they need to do the extra work.
Blork 11:59 on 2024-06-18 Permalink
@mare, that’s true enough, and could be used as a reasonable defence if they projects only occasionally went overboard like that. But they almost always do. It’s systemic, and therefore most likely corrupt, at least corrupt to the point where nobody believes the initial estimates and everyone knows they are way undervalued in both time and cost, but that’s the system. It’s essentially bait-and-switch on a billion dollar level, done over and over again.
P 17:52 on 2024-06-18 Permalink
I understand the cost of labor overages. If it took longer than expected, then it’s reasonable that it’ll cost a good bit to pay people to show up for the extra time.
But when something goes from 1 billion to 2 billion… And from one year to two years… How much of that extra billion went into paying humans?
At a yearly salary of 100k, you could pay 10,000 workers with a billion dollars. Obviously it’s a hypothetical, but these cost overruns are clearly not going primarily toward the cost of the man power.
So what is it? Materials? How does the contractor get away with that? Is the city so weak that they enter into contracts where it’s agreed they’ll pay X for Y to be built… But then halfway through the project, the contractor just says “Oh by the way, it’s gonna cost 2X now, so pay up.”?
Ian 20:38 on 2024-06-18 Permalink
It’s because of the rule that they have to accept the lowest bid.
Everyone in the industry(ies) – and frankly, the city – understands that a formal bid is the bare bones under optimal conditions. Something always comes up. It’s just a shibboleth at this point.
Kevin 21:21 on 2024-06-18 Permalink
The lowest bid assumes perfect conditions on virgin ground.
The lowest bid doesnt take into account the kludges, the hodgepodge of repairs, the blueprints from the past bearing no resemblance to reality.
And the cost overruns affect private companies too—we just don’t hear about them because nobody who is willing to talk to the press digs into their spending that closely.
For instance, a few years back a phone company started digging up an alley in my neighborhood to upgrade a line. A man in his nineties walked out and told the crew the plans were wrong, the line was in a different spot, because there was a giant boulder underground. After a day of fruitless digging, and bringing in bigger and bigger equipment, the crew finally listened to the old man, who was right– and by this point a one hour job took three days and needed the added expense of repaving a lot of the alley.