By Keith Norbury
An oversize load corridor being created in Ontario’s Sarnia-Lambton region is nearly $5 million over its $12 budget, the project manager confirmed recently.
However, $4 million of that shortfall is being covered by a contribution from Cestar College, a private educational institution headquartered in Toronto about 290 kilometres away. Cestar College, which announced the funding last fall, has a long-time relationship with Lambton College.
Lyle Johnson, project manager for the Sarnia-Lambton Oversized Load Corridor, said in a recent interview that the project is also working on receiving a $1.5 million grant from the Southwest Ontario Development Fund. “That pretty much makes up the deficit,” Mr. Johnson said.
The project had earlier received $6 million from the National Trade Corridors Fund as well as $4.715 million from the city of Sarnia, $1.2 million from the County of Lambton, $75,000 from St. Clair Township, and $10,000 from the Sarnia Lambton Industrial Alliance, according to a handout of the corridor proposal. Another $225,000 was previously raised from the partners, and the province of Ontario, to study the proposal.
The project is creating 26.7 kilometres of obstruction-free routes to connect members of the alliance, such as fabricators, with the Port of Sarnia. Among them is LamSar Inc., which makes massive modules for petrochemical companies such as Nova Chemicals, which recently built a polyethylene plant in the area.
In an interview last fall, LamSar owner co-owner Dave Hill said the corridor would enable the company to bid on overseas projects. Without the corridor, the company was constrained in how efficiently it could move cargoes to the Sarnia waterfront for shipment to overseas customers. Temporarily raising utility lines adds considerably to the shipping costs — and that’s if those obstacles can even be moved. “We have to forgo a lot of bids,” Mr. Hill said earlier. “If we can’t physically get to a customer via our own arteries in town here then we’re stuck making components that we have to assemble on site, which increases the cost of construction.”
The corridor project involves burying overhead utility lines — such as for electrical, cable, and telephone. A second element involves widening intersections to allow “swept” paths for long loads to turn, as well as upgrading or replacing culverts. And the third part of the project is upgrading the dock at Sarnia harbour, which is on the St. Clair River between Lake Huron and Lake Erie. The existing dock is on deep water but it isn’t suitable in its present state for roll-on roll-off cargo.
Mr. Johnson said the cost of relocating the utilities “went up significantly”, while estimates for the road work increased by about $800,000. “And then the dock, based on what we were seeing with construction costs, we increased the budget for that by a million,” Mr. Johnson said. He attributed much of the cost increases to lacking sufficient information about the project details at the outset. “First of all, the level of engineering that was completed, they only spent $90,000 to define that $12 million budget, which by all industry standards is quite low,” Mr. Johnson said.
One problem was that the initial estimate was based on multiplying a certain dollar figure by the number of crossings “as opposed to looking at each one individually,” Mr. Johnson said. “They just didn’t have the time to do it.”
Last year, the project management issued an order to the local utility company to provide that detailed engineering estimate, something that was done last summer. Also complicating matters was a recent change to Canadian Standards Association specifications that reduced the allowable load on particular utility poles. “So we ended up having to replace somewhere between 150 and 170 poles that were not included in the original estimate,” Mr. Johnson said.
By mid-February, the corridor work was about 30 per cent complete. “We finished relocating about 60 crossings on two major roads in the county last summer and fall,” Mr. Johnson said.
With the new price estimate of $16.95 million, the timeline for the project has stretched out slightly. Mr. Johnson expects it will now finish toward the end of 2023 with cleanup in 2024. About 95 per cent of the road work will be completed by the end of 2022, he said. The most uncertainly surrounds the dock. “We’re just in the process of awarding the consulting, engineering and environmental assessment for the dock as we speak,” he said.
A very viable economic project
At a meeting in January, some members of Sarnia city council cautioned against any further increases, according to a report by the Sarnia Observer newspaper. But they didn’t talk of scaling it back. Councilor Mike Stark, for example, said the project is too far along to cancel it now. “It’s like being a little bit pregnant. There’s no such thing,” Stark was quoted. Nevertheless, he called for “very tight controls from this point forward in terms of estimates that we receive.”
Mr. Johnson agreed that there was never any thought of abandoning the corridor. “No, no. It’s still a very viable economic project for the region. The business case for the project never changed,” said Mr. Johnson said, whose career has included about three decades with Nova Chemicals in engineering and project management.
Consultants CPCS estimated in a 2016 business case study that the corridor project would, over 30 years, create 2,613 full-time jobs, add $263 million in gross domestic product, and generate tax revenues of $21.4 million (in 2010 Canadian dollars).
Mr. Hill, whose company is part of the industrial alliance, said last fall that the project will “open up the region.” For LamSar, which has 300 to 400 employees and an office in the United Arab Emirates, the corridor will help position it as a supplier to the petrochemical industries in the Middle East. It will also help smaller companies that support larger fabricators, such as Toolrite Engineering, which has three machine shops in the Sarnia area. “We like to view this project as an economic development project versus an infrastructure project,” Toolrite owner Rick Perdeaux, who chairs the industrial alliance, said last fall.
Dock to receive college’s name
Cestar College of Business, Health and Technology also anticipates educational benefits from the corridor. In recognition of the college’s $4 million contribution, the new dock will be named Cestar Dock.
“Our long-time partnership with Lambton College has not only provided mutual benefits to our institutions, but there are hundreds of international students who attend both campuses every year who reap rewards,” Cestar College Director Adrian Sharma said by email. “We were seeking an opportunity to show our gratitude to the City of Sarnia for always welcoming our students, as well as their continued support in the growing success of Lambton College. Our contribution nearly covers the city’s costs to the project, which means those funds can now be used towards other projects to be enjoyed by our students, and members of the Lambton College community.”
Mr. Johnson wasn’t prepared to guarantee that there won’t be any more cost overruns, if only because of the uncertainty with construction projects. “Our estimate level is plus or minus 10 per cent,” Mr. Johnson said, adding “and I’ll put caveat on that: We have approximately 100 crossings that we have to do. And the majority of those are directional bores. So anytime you dig a hole in the ground, you’re subject to surprises.”
About 80 per cent of the utility line crossings are being put underground. For some, such as high-voltage lines, that wasn’t economically feasible. Instead those are being elevated to provide 30 feet of overhead clearance. The corridor will accommodate loads 30 feet wide and 150 feet long.
Dock is the outlier
Mr. Johnson isn’t too concerned about utilities cost overruns. Only about 40 crossings are still to be designed. And even if those costs are 10 per cent more than expected, they would add well under $100,000 to the bill. “The outlier right now is the dock,” Mr. Johnson said. “So we’ve got $6.2 million in the estimate for the dock and until we get into the detailed engineering and the environmental assessments and evaluation of the existing dock, that number is still variable.”
And since it’s a big number, a 10 per cent increase could add $600,000 or more to the cost. “Once we start digging around the area and you get into some contaminated soil or soil conditions that aren’t suitable for bedding or dock facilities, then we can’t control our costs really,” Mr. Johnson said. “That’s the variables.”