WINNIPEG – The Plessis Road underpass could cost the city $5.6 million more than expected, a report to council’s finance committee says.
“This is the worst-cast scenario,” Brad Sacher, the city’s director of public works, told the committee on Thursday.
Some of the costs for the the project, funded by all three levels of government, aren’t eligible for federal funding, the report says.
The projected cost of the underpass is $77 million and it remains on budget, but the expected $50 million in contributions from the federal and provincial governments — $25 million each — have been lowered to $22.2 million each, leaving the city on the hook for the extra money.
The expenses that aren’t eligible for federal funding are the cost of the land, costs incurred before the federal government approved the project, spending on contracts signed before federal approval was obtained, and expenses that will be incurred after the federally mandated completion date, the report says.
“We’ve known the completion date of the end of 2014 was quite aggressive,” Sacher said.
The city wanted to finish the project by March 2015 to secure federal funding. City officials are accusing the CN Railway Company of slowing construction down.
“We have had some challenges with the railway,” said Transcona councillor Russ Wyatt, who also chairs the finance committee.
One of the main sticking points is how much money CN will pay towards the project.
“We are hoping they can put any differences aside and come to the table and assist us,” said Wyatt.
A spokesperson for CN tells Global News the company would like to go to arbitration through the federal government to sort the disagreement out.
In the meantime, Sacher has asked the federal government for an extension of the competition date to cover costs. He has not heard back.
If the date is extended, work done on the project after March 2015 would be eligible for funding. That work will cost $3.5 million, the report says, so receiving approval for funding will save the city more than $3.3 million.