(WINDSOR, ON) – Faced with a ballooning budget for the proposed Gordie Howe Bridge, coupled with the approval for the twinning of the Ambassador Bridge, federal officials have ordered a costs review to be conducted.
More and more, questions are being raised regarding the necessity of the GHB in the wake of depressed cross-border traffic, which has been declining since 2000, and ever escalating estimate to continue with construction.
At the basis of the costs review were concerns from bidders concerned with meeting the government imposed budget cap. While the review will attempt to find cost savings, if the project were to still go forward, it will most certainly be scaled back from original designs in order to meet cost expectations.
The initial estimate for the GHB was $2 Billion, but constant delays and the devaluation of the Canadian dollar have allowed the cost to build the bridge to skyrocket to $4.8 Billion. With shovels yet to turn the soil, those costs could continue to swell between now and when the Windsor Detroit Bridge Authority gets around to selecting a building later this summer.
The $4.8 Billion figure includes the necessary property acquisition on the Delray side of the Detroit River. Numerous properties are still needed by WDBA, with the lands likely to become expensive as any expropriation could be challenged.
Also being questioned is the method the government intends to pay for the bridge. The stated goal is to collect toll revenue from cross-border traffic over a 30-year period to recoup costs. The specific line item calls for the collection of $30 Billion over three decades.
Breaking that down on an annual basis, WDBA needs to collect $1 Billion a year in tolls when the existing Ambassador Bridge has never come close to this figure. Estimates are that the $1 Billion a year revenue is off by about 94 per cent.
Instead, the government has already guaranteed availability payments to make up the shortfalls in revenue for the third-party bridge operator. In other words, taxpayers will be required to ensure the profit margin for the next thirty years after completion.
That’s if the bridge even goes ahead.
The completion date of construction has been put off so many times, the government has declined to make any more predictions when it will open. The last estimate was that the GHB would be completed in 2020, but the federal Minister of Infrastructure, Amarjeet Sohi, wouldn’t confirm the schedule.
“I just want to stress that the 2020 deadline for this project was a very irresponsible approach given that we have not had any necessary properties in possession” Sohi told the CBC. “September, 2018 is the timeline when the deal will be closed with one of the successful proponents. The construction will start immediately after that. But having said that there is a lot of work being done on the Canadian side as well as proceeding ahead with property acquisitions on the US side.”
Three potential bidders were shortlisted in 2016. The selection of the P3 proponent was to have already taken place in 2017. Now, it’s been pushed back to the fall of this year, but even that’s an uncertainty because of the costs review being undertaken. It is unclear if bids will come in within the government’s budget.
When construction does begin, it’s expected that the GHB won’t open for four to five years, putting the operational date back to 2023 at the earliest.
Meanwhile, construction on the Ambassador twin has already taken place with only the central span and the Canadian customs plaza to be completed.