Collingwood's new water treatment plant will cost about double what the town estimated, and it will take two years longer.
That's according to the three bids received today from pre-qualified contractors, which started at $212 million.
A joint statement issued by Mayor Yvonne Hamlin and New Tecumseth Mayor Richard Norcross called the bids "shocking."
In March, 2022, the estimate for the construction of the treatment plant, which will provide drinking water to Collingwood and New Tecumseth, was $121 million, with an expected completion date of 2026. Not only was the lowest bid nearly double the cost, but the completion date is now estimated in 2028.
"This is an essential and urgent project for Collingwood, New Tecumseth, and the surrounding area. Without this plant expansion, we will have limited ability to build new homes or meet provincial housing targets," reads the two mayors' joint statement. "However, our communities cannot fund the entire cost of the expansion."
Talks have already begun between municipal officials and provincial decision makers to discuss financial support.
The total cost, based on the unofficial bid information the town received, is now estimated around $270 million.
"When we received the estimates early last year, we knew they could change but did not expect increases of this magnitude," reads the mayors' statement.
The bid results are unofficial at this time, and a staff report is expected to provide more information to both councils in November.
This is the second time the estimated construction costs have doubled. The March estimates jumped from about $60 million to $120 million.
The town's water treatment plant has been nearing capacity, running over 80 per cent in 2021. Though now lifted, the town implemented a moratorium on new development to protect the remaining capacity. New builds had to go through an exemption process so the water capacity could be allocated.
Since then, the town has added some more capacity with more infrastructure at the plant, but the plan was to have an expanded treatment plant operating by 2026.
Collingwood and New Tecumseth have had an agreement in place since 2008 specifying that Collingwood provides 6,000 cubic metres per day of treated drinking water to New Tecumseth. An expanded water treatment plant will allow that number to increase under a new deal struck between the two municipalities in 2022.
The full text of the joint statement from Mayor Hamlin and Norcross is as follows:
Today we received bids from three pre-qualified contractors for the Raymond A. Barker Water Treatment Plan Expansion project. This is an essential and urgent project for Collingwood, New Tecumseth, and the surrounding area. Without this plant expansion, we will have limited ability to build new homes or meet provincial housing targets.
As per our commitment to keep our communities updated with the latest information, we are sharing what we know so far.
The unofficial low bid received today was $212M for construction alone. The total project costs are now estimated to be in the range of $270M, and the timeline to complete the project has also been extended by about two years longer than originally projected.
This is shocking news. The costs are more than double the estimate from March 2022. We were also planning to have an expanded plant in 2026, not 2028.
When we received the estimates early last year, we knew they could change but did not expect increases of this magnitude. The global economy is still adjusting to a new post-pandemic reality. The water/wastewater and construction industries have been hit hard by ongoing supply shortages, increased construction costs, and shortages of skilled workers. These factors are out of our control, and other municipalities we have spoken with have experienced significant budget increases for similar projects. Staff have already been looking at every option to control costs and reduce the project timeline.
Our expansion project is shovel ready. It is the largest investment in Collingwood and New Tecumseth’s history and an enormous amount of work has happened to get us where we are today. However, our communities cannot fund the entire cost of the expansion.
Staff are investigating all options to finance this project, including contributions from the federal and provincial governments. We have already started engaging with provincial decision makers to discuss financial support. We are also developing an advocacy strategy for the upper tiers of government and will be asking our development communities to support us in these efforts. We are committed to finding a solution that gets the plant built quickly, and without subjecting our communities to financial hardship.
Staff in Collingwood and New Tecumseth are jointly studying the bids and projected timelines and will be completing a detailed evaluation alongside the consultant team. We look forward to their official report that will include the final projected costs and recommended next steps to our Councils before the end of November.
For more information about the project, please visit https://engage.collingwood.ca/
