Green Line LRT | ?m | ?s | Calgary Transit

[ahuch]

C$ 1B is not lost as it has been expended upon design, procurement and placing supply chain contracts to date. If all things were equal, without Alberta interfering, there would be: no negotiating breaches/ terminations of contracts; design issues; staff terminations; liquidating a company; re-designs etc. All that would apply would be a value for escalation which is a valid clause for a project over 2 years in duration. The value to be applied is calculated quarterly. In the execution phase: there will be further design value engineering, innovation and lean construction. With risk and reward, the Contractor's cost per design element is allocated as a an agreed target cost: whatever the underspend or overspend is, a shared %age value is applied which either means a bonus or deduction in value which either benefits or penalises both parties.

I would argue a lot of that is lost at this point if we don't build anything. Design is worthless if you don't proceed with the project scope, land acquisitions and utility relocations don't matter if you don't proceed or choose a different right of way, etc...

 

[InfrastructureEnthusiast]

Look forward to a further breakdown but out of the 1.85 Billion I wonder how much is truly lost. The design has to be some of the smaller numbers, right? The utility work, land acquisition, and the LRV, in theory, could still be useful?

The land acquisition and utility work shouldn't really be lost, whatever replacement project comes along will use much of the same row to SE, hopefully the contracts were written in such a way that the city retains ownership of the design work and not the contractors, otherwise there will be a lot of wheel reinventing...

Some interesting numbers from the CBC article on the wind down:

City officials also said Calgary may be open to litigation from contractors because of broken agreements, although it's unclear to what extent.

Almost 250 employees and consultants were involved in the Green Line on behalf of the city, and about 800 staff were brought in as contractors. There are more than 70 contracts that need to be addressed as a part of the wind-down.

800 contractors seems like an awful lot of of overhead on this project.. I don't think the province was wrong on pulling the pin.

Seems like it would be better an cheaper for the city to keep the design work for these projects in house, and only contract out the construction as required.

Even then, if there were a series of smaller projects in the books that could provide steady work, it might even be cheaper to in source more of the construction and cut out that middleman too.

I think a lot of the construction inflation we've seen in recent years is coming from profit margins that don't really need to be there..

 

[kiggupiggu]

C$ 1B is not lost as it has been expended upon design, procurement and placing supply chain contracts to date. If all things were equal, without Alberta interfering, there would be: no negotiating breaches/ terminations of contracts; design issues; staff terminations; liquidating a company; re-designs etc. All that would apply would be a value for escalation which is a valid clause for a project over 2 years in duration. The value to be applied is calculated quarterly. In the execution phase: there will be further design value engineering, innovation and lean construction. With risk and reward, the Contractor's cost per design element is allocated as a an agreed target cost: whatever the underspend or overspend is, a shared %age value is applied which either means a bonus or deduction in value which either benefits or penalises both parties.

I'm not referring to the money that was actually spent on something (some of that can be considered lost as well). According to the article there is nearly 1 billion in wind down cost.

 

[kempes_78]

I would argue a lot of that is lost at this point if we don't build anything. Design is worthless if you don't proceed with the project scope, land acquisitions and utility relocations don't matter if you don't proceed or choose a different right of way, etc...

You forget that certain contracts are in place: build or not build? Negotiation is key and creative discussions may see Contractors be considered for other projects. There always is middle ground and this is not unusual in megaprojects. There is a key negotiation point: the existing 60% design. Who owns that design presently; what does the design contract state? You would give anything to be a fly on the wall in that bun fight!

 

[kempes_78]

I'm not referring to the money that was actually spent on something (some of that can be considered lost as well). According to the article there is nearly 1 billion in wind down cost.

That is a worst case scenario. Assume that Alberta wants to redesign. Effectively, a 75% staff reduction would be immediately effective (Contractors, self-employed, local staff etc.). 25% staffing is sufficient to calculate termination costs in conjunction with legal teams. Negotiating termination contracts of awarded contracts. What does the contract cover? Overheads and lost profits, reimbursement of insurances, placing of sub-contracts of any tier? The list is endless. A shrewd developer will have covered loss of profit and overheads: you may have a contract but you have not fulfilled obligations to secure insurances etc., without them, you have not complied with the contract - no cost. C$ 1B is an outside possibility but heavy negotiations are an art form.

 

[O-tac]

And Smith said nothing about it in her televised dear leader speech.

 

[kempes_78]

And Smith said nothing about it in her televised dear leader speech.

She is a figurehead and her knowledge is limited, face facts. Her marmite moment is in December when she will critique her Consultant's proposal!

 

[ahuch]

The land acquisition and utility work shouldn't really be lost, whatever replacement project comes along will use much of the same row to SE, hopefully the contracts were written in such a way that the city retains ownership of the design work and not the contractors, otherwise there will be a lot of wheel reinventing...

Some interesting numbers from the CBC article on the wind down:



800 contractors seems like an awful lot of of overhead on this project.. I don't think the province was wrong on pulling the pin.

Seems like it would be better an cheaper for the city to keep the design work for these projects in house, and only contract out the construction as required.

Even then, if there were a series of smaller projects in the books that could provide steady work, it might even be cheaper to in source more of the construction and cut out that middleman too.

I think a lot of the construction inflation we've seen in recent years is coming from profit margins that don't really need to be there..

Land acquisition will be lost in certain regards if the ROW changes (e.g. not building Eau Claire), and when I spoke to utility work I meant all of the underground utilities moved over the last three years to accommodate tunnels. Of course it's not 100% wasted, but we're talking about a lot of money and effort here. In what way does it make sense for the city to staff up employees for a mega project and not use contractors? Industry would never do that, it doesn't make sense to hire FTEs for mega projects... What do you do, lay them off once the projects done? Not following your logic here.

 

[lemongrab]

Land acquisition will be lost in certain regards if the ROW changes (e.g. not building Eau Claire), and when I spoke to utility work I meant all of the underground utilities moved over the last three years to accommodate tunnels. Of course it's not 100% wasted, but we're talking about a lot of money and effort here. In what way does it make sense for the city to staff up employees for a mega project and not use contractors? Industry would never do that, it doesn't make sense to hire FTEs for mega projects... What do you do, lay them off once the projects done? Not following your logic here.

But the city still owns the land, so it can be resold or repurposed if the eventual alignment doesn't use it

 

[InfrastructureEnthusiast]

Land acquisition will be lost in certain regards if the ROW changes (e.g. not building Eau Claire), and when I spoke to utility work I meant all of the underground utilities moved over the last three years to accommodate tunnels. Of course it's not 100% wasted, but we're talking about a lot of money and effort here. In what way does it make sense for the city to staff up employees for a mega project and not use contractors? Industry would never do that, it doesn't make sense to hire FTEs for mega projects... What do you do, lay them off once the projects done? Not following your logic here.

Well at a high level, the logic is "don't build mega projects".

It may end up taking longer to build the line from end to end, but it should be somewhat more efficient as institutional knowledge is built. Knowledge that can be used on other smaller projects like red or blue line extensions, or planning for a fourth line.

As a simpler example, if a city decides to build its first road interchange in 10+ years, knowledge on how to do so likely doesn't exist in house, it will have to be learned or hired in.
Along the way, unexpected caveats will be discovered and have to be accounted for, (ie. something to do with local soil conditions) which will likely delay and add costs to the project.

Once completed, if there are no other interchange projects to work on, the team will be disbanded and the institutional knowledge lost.
When a new interchange project is stood up 10+ years later, many of those caveats will have to be relearned, again at unforeseen expense.

However, if a city has a steady stream of interchange projects to work on, the institutional knowledge doesn't get lost, and successive projects may even become faster and cheaper as more efficient methods are discovered via repetition.

To your comments on the land/util costs, if the revised project uses 2st for an elevated route, much of that work may have been necessary anyways, so very little would be lost.

Will the province's consultants be savvy enough to factor in nuanced detail like that?
I won't bet on it, but I'll hope so!

 

[outoftheice]

Watching Council today we heard that it took 3 years to hire the right people and create the institutional knowledge necessary to deliver a project of this scale. Those people are now out of jobs and few of them will be sticking around so instead of creating that environment where future expansions could build on that institutional knowledge to be delivered cheaper and faster we will be back at square 1. Not to mention any sort of LRT construction has now been delayed by another 2 years minimum according the City Admin today. The UCP's decision will have all kinds of negative ripple effects for our city.

 

[kempes_78]

Well at a high level, the logic is "don't build mega projects".

It may end up taking longer to build the line from end to end, but it should be somewhat more efficient as institutional knowledge is built. Knowledge that can be used on other smaller projects like red or blue line extensions, or planning for a fourth line.

As a simpler example, if a city decides to build its first road interchange in 10+ years, knowledge on how to do so likely doesn't exist in house, it will have to be learned or hired in.
Along the way, unexpected caveats will be discovered and have to be accounted for, (ie. something to do with local soil conditions) which will likely delay and add costs to the project.

Once completed, if there are no other interchange projects to work on, the team will be disbanded and the institutional knowledge lost.
When a new interchange project is stood up 10+ years later, many of those caveats will have to be relearned, again at unforeseen expense.

However, if a city has a steady stream of interchange projects to work on, the institutional knowledge doesn't get lost, and successive projects may even become faster and cheaper as more efficient methods are discovered via repetition.

To your comments on the land/util costs, if the revised project uses 2st for an elevated route, much of that work may have been necessary anyways, so very little would be lost.

Will the province's consultants be savvy enough to factor in nuanced detail like that?
I won't bet on it, but I'll hope so!

Well at a high level, the logic is "don't build mega projects".

It may end up taking longer to build the line from end to end, but it should be somewhat more efficient as institutional knowledge is built. Knowledge that can be used on other smaller projects like red or blue line extensions, or planning for a fourth line.

As a simpler example, if a city decides to build its first road interchange in 10+ years, knowledge on how to do so likely doesn't exist in house, it will have to be learned or hired in.
Along the way, unexpected caveats will be discovered and have to be accounted for, (ie. something to do with local soil conditions) which will likely delay and add costs to the project.

Once completed, if there are no other interchange projects to work on, the team will be disbanded and the institutional knowledge lost.
When a new interchange project is stood up 10+ years later, many of those caveats will have to be relearned, again at unforeseen expense.

However, if a city has a steady stream of interchange projects to work on, the institutional knowledge doesn't get lost, and successive projects may even become faster and cheaper as more efficient methods are discovered via repetition.

To your comments on the land/util costs, if the revised project uses 2st for an elevated route, much of that work may have been necessary anyways, so very little would be lost.

Will the province's consultants be savvy enough to factor in nuanced detail like that?
I won't bet on it, but I'll hope so!

Megaprojects issues are broadly similar from project to project: knowledge to use on other smaller projects? Hmmm, a megaproject is a different beast to a smaller project. Your example is wide of the mark, with respect. Consultants are far more savvy than you give them credit for. Institutional knowledge is never lost and re-learning is not as 'drastic' as you make out. The Province's Consultants will be savvy and will gently critique each other in ways you cannot comprehend. Why do you think Consultant's carry PI?

 

[CalgaryTiger]

It may end up taking longer to build the line from end to end, but it should be somewhat more efficient as institutional knowledge is built. Knowledge that can be used on other smaller projects like red or blue line extensions, or planning for a fourth line.

Isn't this why other regions have more centralized transit/rail planning things like translink? Rail Alberta...

I think the Alberta government believe they can spin this thing up faster than they probably can... What they'll get out of couple months long engineering firm is nothing you can build. I hope they haven't been watching those videos on Chinese cities building out subways in a decade that are bigger than our existing systems. They probably want substantial construction started by Spring '27 so they can have a photo op around election time. 2.5 years does not feel long enough. Maybe it happens but rushing something that isn't ready has its risks.

 

[lemongrab]

Isn't this why other regions have more centralized transit/rail planning things like translink? Rail Alberta...

I think the Alberta government believe they can spin this thing up faster than they probably can... What they'll get out of couple months long engineering firm is nothing you can build. I hope they haven't been watching those videos on Chinese cities building out subways in a decade that are bigger than our existing systems. They probably want substantial construction started by Spring '27 so they can have a photo op around election time. 2.5 years does not feel long enough. Maybe it happens but rushing something that isn't ready has its risks.

it's possible the 'concepts of a plan' is to re-use everything the city did from Shephard to 4th and then they'll slap together the elevated section to City Hall.

But this assumes the city will share all of those plans and continue with their funding...which seems doubtful and that we'll just have a jurisdictional showdown with the province pointing to a dysfunctional council as a reason to dismantle municipal democracy as we knew it.

 

[DougB]

Isn't this why other regions have more centralized transit/rail planning things like translink? Rail Alberta...

I think the Alberta government believe they can spin this thing up faster than they probably can... What they'll get out of couple months long engineering firm is nothing you can build. I hope they haven't been watching those videos on Chinese cities building out subways in a decade that are bigger than our existing systems. They probably want substantial construction started by Spring '27 so they can have a photo op around election time. 2.5 years does not feel long enough. Maybe it happens but rushing something that isn't ready has its risks.

Agencies like TransLink, Sound Transit and BART exist to co-ordinate projects across multiple municipalities. This isn't an issue in Calgary, but Edmonton will need something similar at some point,