Inflation causes infrastructure project price hikes in city, county

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Infrastructure projects in Windsor and Essex County are plowing ahead despite a jump in construction costs.

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A report that went before Essex County council on Wednesday said three asphalt road rehabilitation projects approved earlier this year would cost roughly $680,000 more than expected due to inflation — around five per cent of the projects’ total tender price. Those projects included work at the Sun Parlor Home in Leamington and for the Town of Essex.

While asphalt cement was about $915 per tonne when the tenders closed, it’s expected the price at the time of paving will be approximately $1,300 per tonne.

Although county administration recommended $300,000 worth of paving bed to mitigate the impact of inflation — including 350 meters of County Road 27 north of County Road 8, and County Road 23 — council voted postponed instead to go ahead with the project out of concern that the price of asphalt would rise even further in the future.

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The projects had been scheduled for future years but were moved up to 2022 when provincial funding became available. If they’d been cut from this year’s schedule, they would have been put back into their previous positions in the county’s five-year timeline.

We’re seeing it on materials, we’re seeing it on labor — it’s not just asphalt

County council also approved up to $420,016 in additional funding from the Rate Stabilization Reserve to mitigate the cost of escalating asphalt cement prices.

In Windsor, infrastructure projects have seen a 10 to 40 per cent jump in price, city engineer Chris Nepszy told the Star.

“We’re seeing it on materials, we’re seeing it on labor — it’s not just asphalt,” he said on Thursday. “Everything from signposts to trucking costs.”

The city’s 10-year capital budget has flexibility which allows it to move funds around without impacting projects in the short term, he said. While it “will catch up to you at some point,” the city can complete must-do projects now without feeling the pinch.

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Nepszy said the city deals with increasing costs every year, but this year the increase is greater than he typically sees.

Projects can be deferred, “but that’s not necessarily the best answer,” he said. “There’s infrastructure that has to get put in place, and this council has put a big focus on infrastructure.”

In addition, supply chain issues are causing delays for construction projects, Nepszy said. The city may end up seeing projects delayed not because of funding availability, but because materials are taking months to arrive.

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