MHCA advises Winnipeg City council to reject city-owned asphalt plant

WINNIPEG – The Manitoba Heavy Construction Association (MHCA) is asking Winnipeg City Council to reject a call for a city-owned asphalt plant.

MHCA president and CEO Chris Lornec told council on May 30 that the private sector provides hot-mix asphalt for paving and for patching to the City of Winnipeg at competitive rates due to the efficiencies inherent to industry work and production and that a city-owned plant could not replicate those results.

The motion, presented by City Coun. Russ Wyatt asserted that the city is at “the mercy of the private sector, paying inflated prices for poor service as the heavy construction industry prioritizes its needs over those of the city,” according to an MHCA release.

“None of the motion assertions that pricing is ‘exorbitant’ to feed ‘significant profit margin’ is evident in any facts,” Lorenc said. “The city, in fact, gets hot-mix asphalt competitively. Why? It’s about economies of scale and efficiency.”

The release also said contracts with the private sector are open, transparent and are awarded based on lowest qualifying bid.

“As to the assertion that the city is at the ‘mercy’ of industry regarding timeliness of supply, contracts include strict clauses on when asphalt must be supplied, with delays triggering substantial penalties,” Lorenc said.

“The city would have to invest approximately $5 million, upfront, to set up an asphalt plant, then add in operational and maintenance costs. Tonnage can be sourced from private operators much cheaper.”