Sask. highway construction delayed 2-3 times more than other provinces: report
Last year 51% of highways contracts were late, costing taxpayers
An independent report about highway construction delays in Saskatchewan concludes this province lags far behind B.C., Alberta, Manitoba and Ontario.
Those delays result in additional costs for taxpayers and frustration for drivers.
The report's author, McNair Business Development Inc. of Regina, acknowledged it is difficult to do an apples to apples comparison between the provinces.
"However, evidence suggests Saskatchewan has double to triple the percentage of delayed contracts," the report says.
Highway frustrations a familiar and costly story
Frustrations over bad roads and construction delays are common in rural Saskatchewan.
The reeve of the RM of McKillop, Gary Gilbert, knows all about that.
According to CAA, two of the worst highways in the province, 220 and 322, are in his RM.
Gilbert, said he took a drive on Highway 220 Tuesday.
"I drove 18 kilometers and it took us 34 minutes," Gilbert said.
"And I counted no less than 160 spots on the road that needed to be patched."
Gilbert said the bad roads make it hard for emergency vehicles to respond and for local people to do business. He said the ministry has been working hard to make the road passable but he said the highway needs to be rebuilt.
"Something is going to have to be done on a long term basis, not just the short term, because a year from now this road is going to be beat up again," Gilbert said.
"We're just going to be wasting money patching it up with a bandaid."
But he said this road isn't on the list to be re-paved, and given the growing number of construction delays, he's worried a new highway isn't likely any time soon.
Growing delays cost taxpayers
The report points out that in addition to frustration, the growing number of late projects is also costing taxpayers money because of inflation and project inefficiencies.
The problem has been getting worse every year since 2008 when 29 per cent of highways contracts were completed late. Last year 51 per cent were delayed.
The deputy minister of highways who commissioned the study, Nithi Govindasamy, said the report confirmed what he already knew.
"I'm not surprised by that," Govindasamy said. "I knew there was an issue with respect to delayed contracts. So going forward that is helpful for me to be able to say, 'This assessment and analysis has been done so what are we going to do to improve this situation going forward?'"
Most construction delays are avoidable
Last year, 39 of 76 highways projects were delayed. The report says 27 of those "were attributable to delays or errors which were considered to be avoidable."
The other 12 were late for reasons such as bad weather.
The report says one of the problems is that Saskatchewan awards contracts based on the lowest bid "regardless of the capacity, capabilities or past performance of the contractor."
From its analysis, the report concludes "lowest bid is not necessarily the lowest cost, or the highest value."
That's because some contractors are "bidding on projects with a lesser regard for whether they have the capacity to complete the work by the specified completion date."
This is known as stockpiling. Road construction companies take on more work than they can complete so they'll have work lined up for next year.
Of the 39 projects delayed last year, 21 were stalled because the contractor had a late start. And in most cases that late start was caused by stockpiling.
The report says that's costly "for underemployed contractors who could do the work and get started on the project right away," but are idle because they were underbid.
Rewards and incentives for contractors ineffective
However, the report found that system was "not viewed by many in the industry as significant enough to influence industry performance."
On average, the ministry has assessed about $1 million in penalties (liquidated damages) annually, though the annual construction budget over the past four years has been hovering at or above $300 million.
Interestingly, the report's authors found even some contractors are critical.
"There is a perception in the industry of an absence of meaningful financial and non-financial penalties and consequences for late delivery of projects and according to some, even for poor quality work."
Contracting out contributes to delays
The report found the growing number of delays are caused, in part, by a massive growth in the ministry's highway construction budget. It doubled from $170 million in the 2007-08 year to $340 million last year.
At the same time, the report notes, the ministry has increasingly been "using and relying on outsourced engineering consultants in areas including design and project management."
Bev MacLeod, executive director of the Association of Consulting Engineering Companies of Saskatchewan said the massive increase in spending, combined with this new business model led to confusion and delays.
"With the increased volume it really shone a spotlight on the fact that some process things needed to be addressed," Macleod said.
Govindasamy said in a perfect world he would like to "not have any late contracts at all."
But he said given Saskatchewan's unpredictable weather and short construction season, "I want to reduce the delays in contracts to as small a number as possible."
And he said the ministry is already taking steps in that direction.
Ministry already acting on some recommendations
Govindasamy said he's now meeting regularly with highway construction firms and consulting engineers to fix communications problems and develop policies that will ensure work gets done on time.
He said some changes have already been made. Govindasamy said the ministry is now tendering some highways contracts earlier, as recommended by the report, so contractors can plan ahead.
Organizations representing engineers and construction firms are happy that the government is showing leadership.
Shantelle Lipp, executive director of the Saskatchewan Heavy Construction Association, said in the past there has been a lack of clear communication, leading to frustrating delays.
"I think it just caused a bottleneck. It caused a multitude of issues both on the job site, with the contract administration with how the contracts were being tendered and delivered."
The report also suggests the government should set up a central office that tracks all projects around the province in order to ensure efficiency.
Govindasamy said that is in the works. But other recommendations will take more time and conversation.
The report recommends the ministry develop tougher penalties for late work and require companies to meet rigorous pre-qualifications before bidding on projects.
That's an idea MacLeod supports.
"Making sure you've got the right person with the right capacity, experience credentials to do the things that you need them to do," before they're allowed to bid.
Lipp says highway contractors are open to the idea of banning contractors from bidding if they have a history of being late.
"You're going to see contractors being awarded jobs based on their past performance and that's something the association has never had an issue with," Lipp said.
Govindasamy says these sorts of ideas will require a fair bit of consultation.
He said these problems have developed over a long time and it will likely take a long time to sort them all out.
Lipp said the level of commitment by the ministry to fix the problem is "impressive."
She said before this issue came to light last year "I don't think there was an immediate desire on the part of the ministry to look into the problem because nobody really realized the magnitude of the problem."
But she said that's changed.
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With files from the CBC's Roxanna Woloshyn