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Committee endorses city staff plan for Adelaide St. underpass cost increase

A rendering of the upcoming underpass on Adelaide Street North. City of London / london.ca

London, Ont., councillors sitting on the city’s civic works committee have endorsed a plan that aims to deal with a multi-million dollar budget increase to the upcoming Adelaide Street North Underpass project.

With construction starting in the spring and completion set for the summer of 2024, the underpass will allow traffic to bypass the train tracks between Pall Mall Street and Central Avenue, just west of McMahen Park near the Carling Heights Optimist Community Centre.

When an environmental assessment was drawn up for the Adelaide Street North Underpass in 2018, it revealed delays caused by trains along that stretch of road happen 20 times a day on average, often exceeding a total delay time of two hours each day.

The project’s total budget was set at $58.3 million, but will now require at least an additional $29.3 million, bringing the lowest possible new total budget to $87.6 million.

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During a civic works committee meeting on Tuesday, city staff outlined their plan for dealing with the project’s increased cost, which can be found in this report sent to the committee.

Doug MacRae, the city’s director of transportation and mobility, said the project was particularly prone to budget inflation “due to its unique aspects.”

MacRae added that the top three contributors to the cost increase are the current volatility in the price of structural steel, labour shortages and supply disruptions, as well as “the complex solution required to manage subsurface ground water at this site that requires a specialized contractor to install.”

Other contributors include recent changes to provincial regulations surrounding construction, recently increased railway insurance requirements and uncertainty surrounding the future of COVID-19 pandemic-related restrictions.

“These kind of complex projects like grade separations, there tends not to be a lot of them underway across the province at any given time, so the required contractors to build them tend to be more under pressure with respect to those supply chain and labour shortage pressures,” MacRae added.

“I would suggest that this project, due to its unique nature and scope, is an anomaly within the entire capital program and more prone to the pressures that we’re currently seeing.”

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To cover the added cost, city staff propose deferring two projects: pavement repair for the freeway portion of Highbury Avenue which sits between Hamilton Road and Highway 401, as well as lane upgrades for Southdale Road and Wickerson Road.

The Highbury Avenue project would be postponed three to five years while the other project would be deferred “with a new near-term timing” that will be determined in an upcoming city study on development charges.

The city staff report also noted construction for the Southdale and Wickerson roads project can start “no earlier than 2023 due to new site information including archaeology conditions.”

Staff are also recommending that council select McLean Taylor Construction Limited to carry out the project after the contractor offered the lowest bid available to the city at $60.2 million.

Read more: London, Ont. closing part of King Street for 4 months due to construction

Responding to the report, councillors on the civic works committee agreed the project was too important to deny increased funding.

Mayor Ed Holder expressed concern that other projects could be similarly impacted due to pressure outside the city’s control.

“I’m not anticipating that labour costs or costs of materials are going to go down anytime soon,” Holder said. “To the extent that this was a surprise, I feel we have to proceed with this.”

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“It goes without saying that this project, the underpass on Adelaide, is absolutely critical to the entire city. We’ve been waiting years for this to go ahead,” Ward 10 Councillor Paul Van Meerbergen added.

“I believe the way staff have approached this, in terms of trying to mitigate this increase in budget, makes a lot of sense.”

Ward 2 Councillor Shawn Lewis doesn’t sit on the civic works committee, but attended the meeting to say he’s not happy with the budget increase. Nor is he happy with the Highbury Avenue project being pushed back.

“I’m not thrilled with it, but I recognize the realities of budget … I hope that we continue to prioritize that Highbury Avenue renewal,” Lewis added.

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The committee voted unanimously to endorse city staff’s plan. Along with Holder and Van Meerbergen, the committee also includes Ward 1 Councillor Michael van Holst, Ward 4 Counillor Jesse Helmer, Ward 12 Councillor Elizabeth Peloza and Ward 13 Councillor John Fyfe-Millar.

The full city council will have a chance to grant final approval during its next meeting scheduled for April 12.

The project is also set to receive $11.1 million in federal and provincial funding so long as its complete by 2027, as well as $8.75 million from the Canadian Pacific Railway.

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