The Nova Scotia government’s department of transportation and infrastructure renewal (TIR) has purchased a portable asphalt plant which it plans to operate in remote areas of the province. The portable drum mix plant purchased for $3.65 million from Florida-based Gencor Industries can recycle asphalt and produce warm mix.
After a 20-year hiatus, why is the government getting back into the roadbuilding business? The answer in part is to save taxpayers’ money, says a government spokesperson.
“A number of years ago, we started noticing that the prices for asphalt were significantly higher in remote places where we were getting very limited competition (for road building contracts),” explains Bruce Fitzner, chief engineer of Nova Scotia’s TIR.
“In our business study we found we were only getting one or two bids in those areas,” says Fitzner.
The department’s plans call for limited patching and single-lift asphalt overlays on secondary highways in the highlands of Cape Breton, the Annapolis Valley and Digby regions and along the South Shore of the province.
The 200-ton-per-hour portable drum mix plant purchased for $3.65 million from Florida-based Gencor Industries can recycle asphalt and produce warm mix (make asphalt at low energy-efficient temperatures), explains Gerard Lee, TIR’s manager of maintenance and operations.
Lee says the Florida company’s asphalt plant was selected over another U.S. company’s model because it met all of the requirements of TIR.
The department contacted nine U.S. asphalt plant companies. To Lee’s knowledge, no Canadian companies manufacture such plants.
One of the benefits of the Gencor mix plant is it features an environmentally-friendly volatile reclamation system to exhaust all emissions into the plant, rather than into the atmosphere, Lee says.
Fitzner says the highways department has set an “aggressive target” to complete 90 kilometres this year.
The total budget is about $10 million, which includes $6 million for materials tendered to the private sector, points out Lee.
“All we are doing is mixing and placing the asphalt.”
The Nova Scotia Road Builders Association views the government’s decision to get into the roadbuilding business dimly.
“Based on our own analysis on paving effectively and efficiently . . . we’re sure they are going to cost taxpayers a lot of money,” says Grant Feltmate, executive director of the association.
But Fitzner says of the province’s $281 million highways building budget, only about $10 million is for in-house paving, with $6 million of that tendered to the private sector.
“It’s a very small portion. There is still a lot of work for the roadbuilders out there,” the chief engineer says.
He adds the business model that TIR is based on is the department’s centre-line painting program, which is partly done in-house.
“Because of that natural competition between the contractors and ourselves, our line painting costs in Nova Scotia are among the best, if not the best, in Canada,” according to a study it did three years ago.
“Our belief is that if the agency (highways department) keeps its foot in the door a bit to understand what true costs are it tends to get better prices in the industry,” Fitzner says.
Feltmate argues to ensure competitive pricing on roadbuilding projects, the department should tender big contracts, say, 20 kilometres per contract, not just a few-kilometre contracts.
“If you tender decent sizes, you get competitive pricing.”
Fitzner concurs that tendering larger contracts allows for economies of scale that should result in lower bid prices.
The problem is, however, it can eliminate small contractors from bidding on large contracts, he argues.
“We could be putting the smaller guys out of business, allowing the bigger guys to take over, which lessens the competition and eventually leads to higher contract prices.”
“We want to have a mix of big and small contracts so as to let some of the local small contractors have a chance to bid on some of this work,” Fitzner says.
Impetus for the department getting into the business of paving in remote areas in part stems from its move into chip seal management, a pavement preservation initiative which entails sealing pavement cracks to extend road surface life.
The department first identified the value of chip sealing three years ago and last year it moved its efforts in-house to cut the prices paid through tendering contracts.
“Tender prices started coming in about half the price once we got into the business,” says Fitzner.
Feltmate argues that the government highways department set unrealistic targets in its chip seal program.
In addition to not meeting completion goals last year, he says they are facing a number of repairs for poor quality work which must be remedied at the taxpayers’ expense.
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