It will cost much more than anticipated but delayed construction could drive the price even higher.
City council’s Civic Works Committee (CWC) recommends spending $87.6-million to construct the Adelaide Street CP Rail Underpass, about 50 per cent ($29.3 million) more than the $58.3-million estimate approved by city council in 2018.
“The project has to happen,” said Coun. Shawn Lewis to his colleagues from him. “This will have my support, but obviously none of us are happy about this price increase.”
The inflation rate on complex road construction projects has risen to 11.6 per cent.
One of London’s most highly anticipated mega-projects, the underpass will end frequent delays at the CP Rail tracks between Dundas and Oxford streets.
Delaying the project to scope and launch a new tender process would jeopardize $11.1-million of federal funding that must be utilized by October 2027.
Civic administration recommends filling the $29.3-million budget gap as follows:
- $200,000 from London Hydro & Water/Wastewater
- $11.2 million from city hall’s Lifecycle Renewal Budget
- $8.4 million from additional debt
- $9.5 million from Development Charges
Resurfacing the expressway portion of Highbury Avenue would be pushed back three to five years and road improvements on Southdale Road near Byron will also be delayed.
On Tuesday, council members on CWC unanimously recommended council green-light the project and strategy to fund the budget shortfall.
Coun. Elizabeth Peloza, who chairs the committee, says civic administration is reviewing ways to better estimate project costs.
“Our four-year budget does help to spread [financial impacts] out. There are external factors coming into play: labor shortages, steel shortages, supply chain issues and it is going to be a challenge for the city,” she said.
Council will make a final decision April 12.