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“Due to COVID-19, prices have increased across the board:” Erin awards contract to wastewater treatment plant

ERIN – North America Construction Ltd. was officially selected as the contractor for the Erin Wastewater Treatment Plant.

At Thursday’s in-person meeting, Erin’s board unanimously approved and awarded the tender contract to North American Construction Ltd. for the construction of the wastewater treatment plant for $114 million. It is a fixed price contract.

In a staff report, the bidding for the treatment plant closed March 18, and the city received two bids: North America Construction Ltd. for $114 million and Bennett Mechanical Installations Ltd. for $118 million.

The other three shortlisted contractors did not submit bids. Graham Construction and Engineering LP was experiencing staffing shortages and noted that it was working on several high priority deals; Maple Reinders Constructors Ltd. did not submit a bid due to the terms of the contract.

Meanwhile, ASCO Construction Ltd. did not submit a formal notice to the city, indicating that it was not bidding.

“It was a very technical and rigorous call for tenders and we are satisfied with the quality of the tenders received. We have the best qualified and experienced company. The fact that it’s a local business is an added bonus,” said Nick Colucci, director of infrastructure services for the city.

North American Construction Ltd. is based in Morriston.

In 2019, the project was initially set at $62,988,260 according to a report.

Consultant WSP, in its analysis last year, estimated the cost of the plant at around $95,775,849.

However, due to the global supply chain problem and rising construction costs, the final construction price of the sewage treatment plant turned out to be a 20% increase from the estimate of WSP.

“As you all know, due to COVID-19, prices have gone up in all areas. We are seeing in all municipalities that there is an increase in offers compared to pre-COVID estimates. We don’t think this increase is out of step with other municipalities in Ontario,” Michelle Albert of WSP explained at the meeting.

Mayor Allan Alls noted that Erin’s council had not anticipated any increase in project costs, “when we started the project it was way before my time, we weren’t considering a pandemic and we didn’t weren’t considering a war in Ukraine. All of these things impacted the whole world.

Although this is the largest project ever proposed by the Town of Erin, there are no financial implications for residents, as construction of the sewage treatment plant is funded by the community of development.

In August, Erin finalized deals with developers willing to build new subdivisions connected to the city’s planned sewage treatment plant, which will see the companies pay $94 million in upfront fees for the project.

Com. John Brennan, however, still wonders if the tender contract falls through the cracks, will taxpayers be affected.

“The agreement is drafted in such a way as to provide for full indemnification by the group of promoters in favor of the municipality,” explained Quinto Annibale, the municipality’s lawyer.

“This means that in the event of a lawsuit, developers are required to pay it in full, so taxpayers will not be affected by it. And second, the costs that are contained in the agreement, the developers are required to pay the actual costs and not the estimated costs.

The city is planning a 24-month construction window for the plant’s completion. The construction date has yet to be determined, as well as the timing, execution and terms of payment for all municipal sewage lines for existing landowners within the city limits.

“This sewage treatment plant project has been in the works for a very long time and I’m excited to see it move forward,” Alls said.

“This is the largest infrastructure project ever undertaken by the city. While growth is inevitable, as required by the province, this is a key infrastructure project that will help us grow in a sustainable and responsible way.

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