Fuel prices rising 30-40 per cent in the last few months has major impacts on construction costs. (File photo/NanaimoNewsNOW)

By Jordan Davidson

prices going up

‘Substantially over-budget:’ increase costs in construction market delaying Nanaimo projects

Jun 27, 2022 | 4:55 PM

NANAIMO — Multiple infrastructure upgrades are behind schedule and threatening razor-thin budgets, forcing a rethink from City staff.

Management were blunt when speaking about delays in current and future capital projects at varying stages of completion in the city with major increases in operating costs, supply chain issues, and a skilled labour shortage labelled as key issues.

Bill Sims, general manager of engineering and public works, told councillors during a Monday, June 27 meeting the conditions are volatile and playing havoc on plans and established budgets.

“The market has just been shaken up and we’re still in that feeling of uncertainty. At some point, we anticipate that it’ll settle down and be a little more stable once again, but it’s hard to see that at the moment.”

A handful of projects are already feeling the ripple effects and are either paused or having their schedules adjusted.

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The Midtown Gateway project has been split in half to keep progress moving forward on the new connector around the Bowen Rd. and Northfield Rd. area.

Bike lane and pedestrian upgrades to Albert. St. are on the pause pile.

“When we were about to put it out to market, we looked at the cost estimate that was adapted with the current market conditions, we looked at the market capacity to deliver it, and we just saw that it wasn’t likely we’d get competitive bids or many bids at all because of the timing of the work,” Stewart told councillors.

New estimates suggested the project would come in between 20 to 30 per cent over its approved $400,000 budget from November 2021.

It’s anticipated the project will be held for a winter tender with construction slated for 2023.

Other, less high-profile projects are also being deferred due to market conditions.

Multiple sewer and utility upgrades throughout the city, as well as the paving of a section of Tenth St. have also been put off in the hopes of more favourable financial conditions.

They will eventually come back to Council for updated budget numbers at future meetings.

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jordan@nanaimonewsnow.com

On Twitter: @JordanDHeyNow