Construction has yet to begin on two mega-hospitals for Montreal, and already, critics are questioning the $1.1 billion cost per-hospital price tag plus projected additional costs of $600 million.
The Bottom Line
Two hospitals, metro extension site ‘inflation’ for higher figures
MONTREAL
Construction has yet to begin on two mega-hospitals for Montreal, and already, critics are questioning the $1.1 billion cost per-hospital price tag plus projected additional costs of $600 million.
The two hospitals — McGill University Hospital Centre (MUHC) and the Centre Hospitalier de l’Universite de Montreal (CHUM) — are part of the growing list of mega-projects, which include the extension of the Montreal metro system to Laval, whose budgets are spiralling out of control.
The hospitals are reworking the numbers, according to Julie Masse, communications coordinator at centre hospitaliers universitaires de Montreal, which includes the Centre Hospitalier Universitaire Sainte-Justine.
“We cannot say whether the costs are over or not because nothing is final,” she said. “Each hospital is working at bringing the numbers within the budget that has been authorized up to now.”
Masse noted the planners for both hospitals are working with a set of objectives, parameters, budgets and timetables.
However, Judith Horrell, communications manager for redevelopment project of the MUHC, says the project is on budget.
“We started the decontamination of the Glen Campus last spring,” she said. “We’re ahead of schedule and more than 10 per cent under budget. That is a testament to the rigour with which we are keeping tabs on our budget.”
“We haven’t finalized the overall project costs yet and we are looking forward to having our project manager, master architect and master engineers on board,” she added, noting that the documents for these public tenders are nearly complete.
Meanwhile, the extension of the Montreal metro system to Laval, a project initiated by the former Parti Quebecois government, is costing far more than originally anticipated.
Bandied about for many years by various governments, a 1998 estimate for the cost of the 5.2-kilometre extension with three stations was valued at $179 million. This included a 4.2 km tunnel approximately 23 metres below the riverbed.
When the project was authorized in 2002, the official cost was $378 million. One year later, the cost was revised at $547 million. A revision in 2004 put the price tag at $803 million.
The metro is scheduled to begin operations in July 2007. The tunnel is completed and the track laid. The permanent infrastructure is now being installed.
The Agence Metropolitaine de Transport, the provincial body that oversees commuter rail service in the greater Montreal area, is responsible for the project, which is being constructed by a consortium of the Quebec firms of SNC-Lavalin Inc. and CIMA.
Joel Gauthier, president and CEO of the AMT, was keen to bring the project under control. Following a report from the province’s auditor general that criticized the escalating costs, Gauthier created an external audit committee to monitor the construction and its expenses. This included a revised budget and introduction of engineering planning and construction management (EPCM) to monitor and keep expenses in line.
“We have a weekly meeting with top level executives,” said Gauthier, “but on a daily basis, we now have an interface between the AMT and the consortium to make sure we are on schedule and on budget. The final cost per-kilometre will be at $154 million by the end of 2006.”
He added that the cost is favourable when compared with the $145-million-per-kilometre cost for the extension of the Sheppard line in Toronto (2002), $207 million for Baltimore (2000), $183 million for Hong Kong (construction ongoing) and $166 million for Los Angeles (construction ongoing).
“We’re in the bracket,” said Gauthier.
Gauthier said an EPCM system is essential to establish checks and balances.
“Everyone was aware at day one that at $378 million, it was not enough, but no one addressed the issue because there were no consequences,” he said. “You also need an independent team to make sure that on a weekly basis, one knows where you are in terms of costs and timetables and if there are problems, someone can raise the red flag.”
Gauthier said good estimates that are reviewed by an independent body can ensure that when a project is authorized, it will be built with the real or a reasonable cost.
“In transportation infrastructure, you can do benchmarking and have an idea of what the cost will be,” he added. “We’ve learned that when you want to cut costs on a project, you need to do it at the conception stage. Afterwards, it is very hard.”
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