Earlier this year, Waterfront Toronto was asked by a City Councillor about the Queens Quay revitalization project: How much did Waterfront Toronto originally allocate to the Queens Quay revitalization project? How much is it now and is it on time and on budget?
Normally, Waterfront Toronto would respond to this request within 30 days, but the situation with the Queens Quay budget was different – and here’s why: It was not appropriate for Waterfront Toronto to disclose the budget until several claims from contractors and subcontractors working on the project were settled. These types of claims are common on large, complex construction projects – such as Queens Quay – when labour costs go up because crews are required to remain on site longer or when disruptions happen that reduce crew efficiency. Contractors submit claims to ensure they are fairly compensated for the extra time and effort required to meet their obligations. These claims – which were submitted starting in May of this year – must typically wait until a project nears completion before a fair value on the overall delay and disruption impacts can be calculated.
Given that the Queens Quay project is being funded by public money, had Waterfront Toronto disclosed any budget information during these negotiations, it could have compromised our negotiating leverage and impeded our ability to reach fair settlements of the claims without incurring additional costs – like trying to fairly negotiate the purchase of a house when the owner knows how much money you have to spend.
However, with the majority of the known claims settled, we are now in a position to make the Queens Quay Revitalization budget public. The budget for the Queens Quay revitalization has increased from $93.2 million to $128.9 million – an increase of $35.7 million, or 38.3 per cent – but the project remains on schedule for completion in June 2015.
We’d like to describe the project, explain how and why the budget increased, and outline how we reviewed the entire process to ensure we learn from the experience.