[InfrastructureEnthusiast]

a chain of...restaurants, you say?

They could also be sold to hipsters as tiny homes, or used as an exhibit in a museum of planning follies..

Or just sell them on Ottawa or Edmonton who are too far down the path already.

 

[ahuch]

C$ 1B is not lost as it has been expended upon design, procurement and placing supply chain contracts to date. If all things were equal, without Alberta interfering, there would be: no negotiating breaches/ terminations of contracts; design issues; staff terminations; liquidating a company; re-designs etc. All that would apply would be a value for escalation which is a valid clause for a project over 2 years in duration. The value to be applied is calculated quarterly. In the execution phase: there will be further design value engineering, innovation and lean construction. With risk and reward, the Contractor's cost per design element is allocated as a an agreed target cost: whatever the underspend or overspend is, a shared %age value is applied which either means a bonus or deduction in value which either benefits or penalises both parties.

I would argue a lot of that is lost at this point if we don't build anything. Design is worthless if you don't proceed with the project scope, land acquisitions and utility relocations don't matter if you don't proceed or choose a different right of way, etc...

 

[InfrastructureEnthusiast]

Look forward to a further breakdown but out of the 1.85 Billion I wonder how much is truly lost. The design has to be some of the smaller numbers, right? The utility work, land acquisition, and the LRV, in theory, could still be useful?

The land acquisition and utility work shouldn't really be lost, whatever replacement project comes along will use much of the same row to SE, hopefully the contracts were written in such a way that the city retains ownership of the design work and not the contractors, otherwise there will be a lot of wheel reinventing...

Some interesting numbers from the CBC article on the wind down:

City officials also said Calgary may be open to litigation from contractors because of broken agreements, although it's unclear to what extent.

Almost 250 employees and consultants were involved in the Green Line on behalf of the city, and about 800 staff were brought in as contractors. There are more than 70 contracts that need to be addressed as a part of the wind-down.

800 contractors seems like an awful lot of of overhead on this project.. I don't think the province was wrong on pulling the pin.

Seems like it would be better an cheaper for the city to keep the design work for these projects in house, and only contract out the construction as required.

Even then, if there were a series of smaller projects in the books that could provide steady work, it might even be cheaper to in source more of the construction and cut out that middleman too.

I think a lot of the construction inflation we've seen in recent years is coming from profit margins that don't really need to be there..

 

[kiggupiggu]

C$ 1B is not lost as it has been expended upon design, procurement and placing supply chain contracts to date. If all things were equal, without Alberta interfering, there would be: no negotiating breaches/ terminations of contracts; design issues; staff terminations; liquidating a company; re-designs etc. All that would apply would be a value for escalation which is a valid clause for a project over 2 years in duration. The value to be applied is calculated quarterly. In the execution phase: there will be further design value engineering, innovation and lean construction. With risk and reward, the Contractor's cost per design element is allocated as a an agreed target cost: whatever the underspend or overspend is, a shared %age value is applied which either means a bonus or deduction in value which either benefits or penalises both parties.

I'm not referring to the money that was actually spent on something (some of that can be considered lost as well). According to the article there is nearly 1 billion in wind down cost.

 

[kempes_78]

I would argue a lot of that is lost at this point if we don't build anything. Design is worthless if you don't proceed with the project scope, land acquisitions and utility relocations don't matter if you don't proceed or choose a different right of way, etc...

You forget that certain contracts are in place: build or not build? Negotiation is key and creative discussions may see Contractors be considered for other projects. There always is middle ground and this is not unusual in megaprojects. There is a key negotiation point: the existing 60% design. Who owns that design presently; what does the design contract state? You would give anything to be a fly on the wall in that bun fight!

 

[kempes_78]

I'm not referring to the money that was actually spent on something (some of that can be considered lost as well). According to the article there is nearly 1 billion in wind down cost.

That is a worst case scenario. Assume that Alberta wants to redesign. Effectively, a 75% staff reduction would be immediately effective (Contractors, self-employed, local staff etc.). 25% staffing is sufficient to calculate termination costs in conjunction with legal teams. Negotiating termination contracts of awarded contracts. What does the contract cover? Overheads and lost profits, reimbursement of insurances, placing of sub-contracts of any tier? The list is endless. A shrewd developer will have covered loss of profit and overheads: you may have a contract but you have not fulfilled obligations to secure insurances etc., without them, you have not complied with the contract - no cost. C$ 1B is an outside possibility but heavy negotiations are an art form.

 

[O-tac]

And Smith said nothing about it in her televised dear leader speech.

 

[kempes_78]

And Smith said nothing about it in her televised dear leader speech.

She is a figurehead and her knowledge is limited, face facts. Her marmite moment is in December when she will critique her Consultant's proposal!

 

[ahuch]

The land acquisition and utility work shouldn't really be lost, whatever replacement project comes along will use much of the same row to SE, hopefully the contracts were written in such a way that the city retains ownership of the design work and not the contractors, otherwise there will be a lot of wheel reinventing...

Some interesting numbers from the CBC article on the wind down:



800 contractors seems like an awful lot of of overhead on this project.. I don't think the province was wrong on pulling the pin.

Seems like it would be better an cheaper for the city to keep the design work for these projects in house, and only contract out the construction as required.

Even then, if there were a series of smaller projects in the books that could provide steady work, it might even be cheaper to in source more of the construction and cut out that middleman too.

I think a lot of the construction inflation we've seen in recent years is coming from profit margins that don't really need to be there..

Land acquisition will be lost in certain regards if the ROW changes (e.g. not building Eau Claire), and when I spoke to utility work I meant all of the underground utilities moved over the last three years to accommodate tunnels. Of course it's not 100% wasted, but we're talking about a lot of money and effort here. In what way does it make sense for the city to staff up employees for a mega project and not use contractors? Industry would never do that, it doesn't make sense to hire FTEs for mega projects... What do you do, lay them off once the projects done? Not following your logic here.

 

[lemongrab]

Land acquisition will be lost in certain regards if the ROW changes (e.g. not building Eau Claire), and when I spoke to utility work I meant all of the underground utilities moved over the last three years to accommodate tunnels. Of course it's not 100% wasted, but we're talking about a lot of money and effort here. In what way does it make sense for the city to staff up employees for a mega project and not use contractors? Industry would never do that, it doesn't make sense to hire FTEs for mega projects... What do you do, lay them off once the projects done? Not following your logic here.

But the city still owns the land, so it can be resold or repurposed if the eventual alignment doesn't use it