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Savings review for Gordie Howe bridge ordered over cost concerns

Federal spending projections account for some $4.8 billion in costs.


OTTAWA — The federal government ordered a review of the budget for a new cross-border bridge in Windsor, Ont., after concerns arose that the cost was in danger of exceeding spending targets, newly released documents show.

Officials found ways to save money on the Gordie Howe International Bridge “without significantly changing the risk” to the federal government, noted one slide from a presentation that was delivered to senior government officials last October.

The review was focused on construction costs after the Crown agency overseeing the project heard concerns from the three bidders about meeting the government’s budget expectations, insiders say.

Experts from both within and outside government were consulted early last fall to evaluate the concerns of bidders and to find the necessary savings through technical changes to the project.

A spokesman for the Windsor-Detroit Bridge Authority said the Crown agency had to ensure it was “providing value to Canadian taxpayers,” but refused to answer further questions about the spending review.

The government is keeping a tight lid on the cost of the bridge. The federal spending projections account for some $4.8 billion, including costs to prepare and purchase properties, construction of the bridge itself and building new customs plazas on both each side of the Canada-US border.

In return, the government and the private company that’s to build and operate the new crossing together hope to collect enough toll revenue over the first 30 years of its life to recoup the cost.

The Liberals are likely to find out in the next few weeks if the savings identified in the “affordability review” will yield the intended results when the three groups vying for the project file their financial bids.

A group of deputy ministers was briefed in late October about the proposed changes to construction plans and the spending review, as well as the effects on cash flow, the risks to private capital and project timelines.

All dollar figures have been redacted from the presentation, which was obtained by The Canadian Press under the Access to Information Act, on the grounds that the information could harm Canada’s economic and financial interests.

The Liberals expect to award a contract in the coming months, with construction starting this fall. The bridge is not expected to be completed for four to five years.

At the same time, the private company that owns the existing Ambassador Bridge between Windsor and Detroit has been given the go-ahead to build a replacement span, subject to multiple conditions that include the demolition of the aging span.

Green-lighting the Ambassador Bridge replacement prompted speculation about how committed the Liberals actually are to the Gordie Howe project. The government pushed back, saying the plan was always for two crossings at the busiest trade point between Canada and the US.

The briefing note, marked “secret,” said the federal communications efforts hit their mark: Officials were quoted as saying “a replacement span is not imminent” for the Ambassador Bridge because governments had to issue demolition permits for the existing structure before construction on a replacement span started.

“Still, it is important that the government reiterate their commitment to this project given recent media coverage,” the briefing note says of the Gordie Howe bridge, adding “strategic, factual and co-ordinated information” on the project would “assure stakeholders.”

 

News from © Canadian Press Enterprises Inc. 2016

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