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It is no secret that transit infrastructure construction is a challenge.
From project costs, schedules, taxpayer buy-in, government funding, supplier issues, equipment delays, and the weather – everything about transit infrastructure construction is unpredictable and fraught with issues.
A quick review of various research papers into the problems plaguing mega-project construction and urban transit reveals some interesting conclusions:
“Cost overruns and delays are one of the few issues that unite this country. There’s something much bigger going on than just a challenge of how government delivers projects. This is something that’s endemic and inherent in big scale infrastructure projects.” Matti Siemiatycki University of Toronto professor and author of Cost Overruns on Infrastructure Projects: Patterns, Causes, and Cures
“Absent or inadequate risk assessment and management are, in themselves, an important source of risk for projects. Because, until now, no reliable measure has been available for estimating risk in urban rail projects, effective risk assessment and management have been impossible.” Brent Flyvbjerg author of Cost Overruns and Demand Shortfalls in Urban Rail and Other Infrastructure
We’re currently seeing a boom in urban transit infrastructure construction projects. Many local governments are realizing the importance of improving how citizens move around their communities. The traditional approach of building more roads simply is not working – enter a focus on light rail projects.
In this blog post, we’re taking a look at the Kitchener-Waterloo, Ontario light rail transit (LRT) system.
This blog is part of our ongoing series on lessons learned from large-scale construction projects. Read about the Boston Big Dig, Honolulu Rail Project, and the Berlin Brandenburg Airport.
Our goal with this series is to highlight lessons from projects that haven’t gone as planned, showing how these lesson should be used to improve the decision-making process before digging starts.
If you have large-scale or mega-construction projects you’d like us to take a deep dive on, contact me with your suggestions.
Kitchener-Waterloo ION LRT Delays and Cost Overruns
10 years after approving the construction of the Kitchener-Waterloo, ION LRT project, citizens were able to start using the electric rail transit system. Originally scheduled for launch in 2017, the LRT system started running on June 21, 2019.
The total estimated cost of the ION LRT system is still not known. As of December 2017, cost overruns were expected to reach $50 million CAD, however as of August 2019, the final cost of the project has not yet been released.
The initial budget for the project, which is expected to bring 17,000 new jobs to the area and $2 billion in development projects, was $818 million.
A number of reasons were cited for the delays in the launch of this LRT project:
Late delivery of Bombardier train cars pushed the start date out multiple times. 14 light rail vehicles were supposed to be delivered on December 10, 2016 but were not received until April 2018.
The ION LRT project used a design-build strategy. This strategy made it difficult to quickly adjust for unexpected ground and below ground discoveries – causing delays in design, construction, and forcing cost overruns.
Construction crews and the designers were not prepared for what they found below ground. Workers have discovered long buried rail lines, unexpected utility systems including gas, electric, water, and sewage lines, and old hydro bunkers.
The trickle-down impacts of these three core problems resulted in construction crews and others running into issues with the weather. This slowed down construction, forced redesigns and slow-downs, as well as changed how the trains were tested for safety and reliability.
As a result of these delays and cost overruns, the city was also forced to quadruple its 2016 budget for utility relocations. The following excerpt from a news article about ION LRT project, sums up how construction delays and cost overrun impact citizens and government officials:
Kitchener had budgeted $406,000 to relocate gas pipelines in 2016 as part of the construction for the light rail transit system, which is a regional project. But financial planners had to add another $1.3 million for 2016, because the work is proving far costlier, as the work gets pushed into winter.
“The dollar figure just blew me away when I first heard it,” said Coun. Frank Etherington, noting that the city is being forced to absorb the costs, even though it has no control over the project or the timelines on the region-led project. “We’re being held ransom on this.”
And the city is guaranteed to face even more unbudgeted costs on LRT construction.
Kitchener will have to pay its share of four more LRT gas relocation projects due to start in 2016, but hasn’t set any money aside in its budget because it hasn’t received any information about when those projects will go ahead or even a ballpark figure of what they might cost. (LRT Cost Overruns Force Kitchener to Quadruple Its Budget for Utility Relocations)
Moving Forward with Urban Transit Infrastructure Construction
As we have learned with investigations into other major transit infrastructure projects, its key that stakeholders and government officials rethink how they approach urban transit construction.
Consider this introductory statement from Cost Overruns on Infrastructure Projects: Patterns, Causes, and Cures:
Rather, the all-too-human tendency to underestimate the costs and time required to complete a project means that megaprojects are well-nigh guaranteed to exceed their budgets and schedules. At the same time, promoters of megaprojects may deliberately misrepresent the budget and schedule to ensure approval of projects from which they will gain – financially, professionally, or politically.
This for us, underscores the importance of taking a step back and taking steps to remove the bias from the decision-making process. Every project stakeholder has noble and good intentions, however the desire to see a project happen can cloud decision making.
By working with a partner like PCS, you get unbiased independent analysis, review, and guidance during your entire project. Expect us to ask hard questions about design, schedules, budgets, contracts, promises, and the ultimate project goal.
About the author
Lee Thomas, MBA is the chairman and CEO of Project Cost Solutions. Lee has over 20 years of hands-on operational process experience under his belt. He is deeply committed to seeing your construction project succeed.