DRIC Road Stories

OMG...I almost was not able to write this BLOG this morning. I started reading the Star online story about the short-listed companies for bidding on the P3 for the DRIC road and I got faint and very ill.

It was necessary for my wife to call an ambulance who took me quickly to my closest Bank branch so I could transfer my money to a secret Swiss bank account. You see I got a sharp pain in my wallet!

I guess that, like completing the DRIC Bridge by 2013 was a mere target and not a promise since now the time is 2015 or later, the $1.6B cost figure for building the DRIC road was also a lie eeerrrr a target:

• "While $1.6 billion has been touted for months by DRIC and politicians as a projected cost for the parkway, that number should be thrown out the window, Livingston said.
  
  "We don't give (bidders) a budget," he said. "We give specifications of what we want to have built. They design to those specifications and put a price on design.
  
  "Our answer is 'it's going to be, what it's going to be.' We rely on the competitive process to get the best numbers. The presumption is they will fight with each other to come up with the lowest price."

I have to send this line to the MegaProject Danish Professor. He won't believe it. It is good for a chapter in his next book.

My BLOG on the DRIC cost estimates may be true....multi-billions for the cost since the P3 companies will make a huge profit on the deal.

Here are some more thoughts in no particular order:

DOUBLE AND NOTHING

Isn't that what the Feds are now saying to the Ambassador Bridge Company?

The Feds are trying everything to stop them from building their Enhancement Project Bridge.

My recollection is that, for the Bridge Company, once they get their permits, their bridge will be up in around 30 months. Not the DRIC Bridge:

• "The government of Canada is anxious to start construction of the new bridge as soon as possible," said Mark Butler, spokesman for Transport Canada.
  
  "Once we receive all the necessary approvals on both sides of the border and have assembled all the land needed for the new inspection plazas and bridge, we will begin the preliminary design stage.
  
  "We estimate that the new crossing will be completed in four or five years from start of construction."

48-60 months. Just about double the construction time of the Bridge Company's bridge project. And maybe more slippage from 2015 since Michigan is in no hurry to give approvals it seems.

ANOTHER E-HEALTH SCANDAL IN THE MAKING

Given the billion dollar waste, how can anyone in Government have the nerve to make such a stupid comment and so soon after the Auditor General's report:

• "It may end up as a road to nowhere, but the $1.6-billion Windsor-Essex Parkway is going to be a reality -- and very soon, the president and CEO of Infrastructure Ontario said Thursday.
  
  Whether a new international bridge in Brighton Beach ever gets built or even if Michigan backs out of the proposed $5-billion border infrastructure effort, construction will start "almost immediately" in Windsor on a new border highway in the Talbot Road-Huron Church Road corridor, said David Livingston.
  
  "The road is going ahead," he said."

Dwight and Sandra might want to suggest to the Premier that a HUGE audit take place immediately in Infrastructure Ontario projects after an idiotic statement like that.

Ohhhhhhhhhh, there is that wallet pain again.

EDGAR (AKA EDDIE) WHO

• "The specifications for the project will be based on the province's plan, not the city's GreenLink, and there won't be significant alterations, like more tunnelling, Livingston said. It's now out of the politicians' hands.
  
  "My job is just to get the project going," he said.

Whew, Dwight and Sandra are off the hook now. No meeting with Council is needed to be cross-examined or to justify anything now.

UNRUFFLING THE BRIDGES

Remember that commercial for the potato chips: "Ruffles have ridges"

What else would you expect Caanda to say

• "Canadian officials unruffled as Michigan limits DRIC funding
  
  Canadian officials say they are not concerned about construction delays after the Michigan state legislature decided last week to limit funds for a new Detroit River bridge to US$2.5 million in fiscal 2010...
  
  "We understand that the legislature has requested MDOT to come back in the new year with additional information," said the ministry's Fausto Natarelli.
  
  "We extend our support to MDOT on this."

The value of that support plus $2.50 might be enough to buy a bag of Ruffles.

ANNE ALMOST GOT IT RIGHT

Good column by her except she did not follow through on the only conclusion possible: DRIC is dead.

• That may be, but this is a joint Canadian and American project. While we're blazing forward, Michigan is not. The state is the lead body for the project on the American side. But legislators there are still wrangling over it, and the treasury doesn't have any money.
  
  
• The Michigan legislature capped funding for a new bridge at $2.5 million in fiscal 2010. Along with federal funding, that provides a grand total of $12.5 million on the American side next year.
  
  
• The state will allow the Detroit River International Crossing team to conduct engineering work and pursue a private partner to help finance the project. But it's not bound to start construction. In other words, for that amount, DRIC can shuffle some paper.
  
  
• Traffic has fallen during the recession, so the question that critics in the legislature will ask is, Do we need a new crossing?
  
  
• The Canadian government, won't begin preliminary design until all the necessary approvals have been received and the land assembled on both sides.
  


• Meanwhile, Windsor, which is demanding another kilometre of tunnelling on the parkway to protect neighbourhoods, won't let provincial officials and engineers on city property to conduct surveys.
  
  
• We might not know when there will be a bridge at the end of our new road to nowhere.

Her conclusion was

• but at least it will be a better road, and building it will create jobs.

Really, after all of those negatives.

What she should have said is that it is time for the Canadian and US governments to sit down with the Bridge Company and arrive at a solution to this mess that everyone can live with or we will be talking about this as the court battles go on for the next decade or two on both sides of the river.

GUARANTEED MEGA-PROFITS AT TAXPAYER EXPENSE

The costs of the DRIC road will be huge no doubt. Multi-billions. So why would all of these world-class companies want to build the DRIC road when companies like Macquarie who also bid and was short-listed are having problems with their toll roads around the world.

Simple....they have little risk and the upside is huge: mega-gigantic profits, a gift from Finance Ministers Dwight Duncan and Jim Flaherty to them:

• "A winning team will be selected in 2010 to design, build, finance and maintain The Windsor-Essex Parkway, which will be owned and operated by the provincial government and it will not be tolled. "

So we pay for the road, not users. The P3 investors do not have to worry about collecting tolls from users when taxpayers will pay

Ohhhhhhhhhh, that sharp wallet pain again. Call an ambulance for me!

The Province could have gone out and borrowed the money over 25 years at a lower rate but then the P3 investors could not make their obscene profits.

Notice also the period is 25 years now not 30 so the business risk is even less.

• "The winning bidder will be responsible for maintaining the road for 25 years after construction — a provision to ensure there is no shoddy construction."

And in the 26th year, who pays for the required work as happened with our Tunnel as readers may recall when the City took it over.

Expect as well something like this because money is hard to find these days

• "The Canadian province of Ontario reached financial close with a Plenary-led consortium on the C$535 million ($454 million) Niagara hospital project on 27 March. The financing is the first for a design-build-finance-maintain concession in the province since the credit crisis hit. It closed by falling back on the resources of domestic lenders and equity providers, and because the province committed a generous slug of progress payments to compensate for weak lender appetite."

A TERRIFIC CRYSTAL BALL

Which short-listed organization suspected years ago that the P3 model would be used for building roads in Ontario even if the Government would never charge tolls for vehicles using it?

What an amazing prediction that came through. Even before anyone ever thought of an economic meltdown in the financial markets too.

WHAT A SHOCKER

Not really, they will wind up working with the winning consortium I am certain:

• "One notable omission from the short list of finalists was a group led in part by local company Coco Paving -- a consortium known as WEP Development Partners also being led by FCC Construction and Obrascon Huarte Lain, both based in Spain.
  
  Coco Group of Companies was listed as a smaller subcontractor in another bid that did make the finalist list called Windsor Essex Transportation Partners...
  
  "I guess Coco Paving is the surprise," said Jim Lyons, executive director of the Windsor Construction Association. "They have become such a huge organization I thought they might be a natural to be on the short list, but they didn't get selected."

WHATEVER HAPPENED TO...

I am sure that you can figure out who I mean since their name was invisible in the news stories.

I suspect though that they are lurking around in the background. Such modesty.