Winnipeg sewage plant budget may further increase amid contractor dispute

Winnipeg’s city council is being asked to approve another $47 million towards the North End Sewage Treatment Plant. CTV’s Jeff Keele reports.

Winnipeg’s most expensive project may be going up in price, again.

“These are circumstances that have driven up costs for everybody, so our budget went over,” said Water and Waste Committee Chair Coun. Ross Eadie.

The $3 billion North Winnipeg sewage plant is being done in three phases and has ballooned in price over the years. It was initially estimated at $795 million.

Council is now being asked to approve another adjustment to the budget of $47.5 million for phase one. A report to the Water and Waste Committee said that would bring the total to $565.35 million, a nine per cent hike.

Tim Shanks, director of the water and waste department, said he knows it’s a big number.

“Everybody is conscious of that, but we do feel this represents value for the city to go this way,” Shanks said.

The report said the additional funding is needed to settle a dispute with the contractor over cost escalations related to the pandemic. It said if the matter went to arbitration, the city could be on the hook for even more.

“It devoids any kind of arbitration, or any kind of additional legal costs, or the uncertainty of arbitration,” Shanks said.

The report said the city also sought advice on the decision.

“The public service engaged third party consultants for assistance and expert review of contract conditions, legal options, and contractor cost data,” said the report.

The cost increase will be covered by a reserve fund, and this plan also restores a $24 million contingency for phase one.

Gage Haubrich, Canadian Taxpayers Federation Prairie director, said the city needs to find savings within this project or in another area to make sure this latest hike doesn’t hit water and sewer bills.

“It shouldn’t just be the city saying, ‘this is costing us more so we’re going to make you pay more,’” Haubrich said.

The project, which is provincially mandated, aims to protect Lake Winnipeg and make sure the city has enough sewage capacity, which could run out in a few years.

“The city is growing, densifying as well, and densification does increase water consumption and flows in sewers and so on,” Eadie said.