Monster sewage-plant upgrade hit by another cost overrun

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This article was published 30/01/2024 (625 days ago), so information in it may no longer be current.

The failure of a large interceptor sewage pipe is being blamed for another multimillion-dollar overrun on the city’s largest infrastructure project.

The cost of the headworks facilities (phase 1) of the north end sewage treatment plant upgrade is set to rise another $44.5 million due to the issue, a new report says.

The report notes an exposed part of the northwest interceptor, which was built in 1970 to transport sewage to the plant, failed “catastrophically” during heavy rain on June 7, 2023, as chambers and interconnecting tunnels were being constructed.

“It flooded a construction area. Significant cleanup and repairs were required that caused an overall project delay,” writes Cynthia Wiebe, the water and waste department’s manager of engineering services, in the report.

Coun. Brian Mayes, chairman of council’s water and waste committee, said he believes covering the cost hike is unavoidable. However, he plans to ask staff if bigger contingency funds and other cost-control measures can be used to avoid price hikes in the future.

“That’s a couple of community centres that you could have built with that (price)… That’s a big chunk of money,” said Mayes. “These are huge projects and we’re dealing with some pretty old infrastructure by Winnipeg standards. I do think we need a better understanding… of what these risks are. Otherwise, it just becomes a seemingly endless series of reports with costs overruns.”

The latest cost hike will bring the headworks project cost to about $518 million, up from a 2019 cost estimate of $408 million. A $65-million budget boost was approved in 2021.

The project is just the first phase of work. In total, the three phases of the sewage plant upgrade have a budget in excess of $2.3 billion, making it Winnipeg’s most expensive infrastructure project.

In the fall, council approved a $482-million hike for the second phase of work, a biosolids facilities project.

In terms of the pipe failure, Mayes said there was a clear risk in working around aging infrastructure.

“There’s an inherent risk in exposing old pipe. We did have some insurance and the estimated cost incorporates some recovery (from that) but this is the risk in doing this type of work, the staff tell us,” he said.

The report notes an additional $8-million cost linked to the failure is expected to be covered by insurance, though the claim has not been finalized.

While he’s concerned about the rising cost, Mayes said the project is running smoothly in other ways, so the interceptor failure isn’t a major setback.

The extra costs are expected to cover repairs, cleanup, the recovery of a tunnel-boring machine and delay, as well as $4 million worth of measures to pre-emptively protect a separate 88-year-old Main Street interceptor pipe from failing during further construction, the report notes.

The cost hike would also cover debt financing and additional contingency costs.

“Unfortunately, incidents like this pipe failure (are) a risk when working on old, underground infrastructure. This pipe failure caused significant flooding that required cleanup, replacement of damaged equipment and resulted in project delays. All of these items increase project costs,” wrote spokeswoman Lisa Marquardson, in an emailed statement.

The city will use retained earnings, along with $25 million of new debt, to pay for the added costs, if council approves.

The water and waste committee will vote on the over-expenditure request on Feb. 5.

joyanne.pursaga@freepress.mb.ca

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