Raise the Hammer

Sorry Jim C, I work in the industry, that's just not true, only about 3% are over budget. You are showing what is the end result of the impression given off by people who don't want a particular project to happen at all or when the press concentrates on a small number of or a single high profile project that very publically, goes over budget. The vast majority of other projects are on time and on budget. You never hear about it because you most likely don't follow all the transit construction projects that go on all the time and a project which comes in on time and on budget doesn't make it to the news.

The problem and answers are found when you look at the real reasons when, why and how projects go over budget. The current crop of TTC projects like the subway extension to Highway 7 in Vaughn went over budget because provincial politicians decided to change the scope of the project (decided the line should go into York Region instead of stopping at Steeles Ave.), which changed the projects timeline (it took 6 years for York Region to decide if they wanted it or not), which then caused a huge increase in the costs of the basic construction materials because the original signed guaranteed prices could not be maintained because the materials agreement had timed out. Large construction projects get price guarantees on materials if they are purchased in a legally defined period. If they go beyond that time the price guarantees do not apply. Especially in an industry where materials like reinforced concrete have been rising in cost, twice the rate of inflation since the mid 1990's and shows no signs of slowing down. Just between 2003-2012 alone, the price of concrete effectively doubled, North America wide! If you put 6 years on to a large construction project like a subway extension you are begging for cost increases. That's why if certain local politicians in Hamilton keep derailing the processes for the B-Line LRT project, forcing votes and re-votes as well as asking for various plebiscites and referendums, especially as the crucial RFQ and RFP process begins (a process which for legal reasons must take between 18-24 months to fully complete) there is a threat of the project budget getting blown and then the project may have to have a cut in scope. All of this not because there was something wrong with the LRT project but because people were to fixed in the past, far too desperate to hold back change in a city that needs change, in a big way.

The new Leslie St. Streetcar barn went over budget because the TTC were forced to openly tender several crucial specific railway/streetcar related sub projects, instead of going to companies they new who could do the job, but were initially not the lowest bidder. Like any openly tendered projects in the public/government domain, they were forced to go with the lowest bidder. Many of these new companies it turned out, couldn't do the job and the cost to fix their mistakes blew the budget wide open. For example, hiring the lowest bidder on the contract to build the connecting track outside on Leslie Street. The main contractor's reputation checked out but its main subcontractor had no experienced staff who could lay streetcar track in an urban environment (insulated and shock absorbed streetcar tracks set in a concrete base that could withstand constant expansion and contraction due to climate). Therefore, the track on Leslie St. had to be done 3 times before it was acceptable to the TTC. Many of these types of rail transit projects only have a small number of contractors and subcontractors who know how to do the job correctly. This is why the TTC rarely would openly tender projects. In the long run, just staying with the group of companies who know how to do this generally makes the overall job cheaper but appears to make it more expensive initially.