St. John's harbour cleanup will cost millions more

The price tag of the St. John's harbour cleanup is jumping by millions of dollars because of rising labour and material costs, city council said Tuesday evening.

Council has awarded the tender for the latest phase of the project, which involves sinking a five-foot diameter pipe under the water on the north side of the harbour from Beck's Cove to Waldegrave Street.

The work must be done by underwater divers, and the tender was awarded Monday for $1 million more than was expected.

Art Cheeseman, director of engineering with the city, told CBC News ballooning labour and material costs are pushing up the price of the project even more than that.

The first phase of the project, which is now finished, was expected to cost $11.5 million, butit's final price tag was $15.2 million.

"Last year we were predicting somewhere between 25 to 30 per cent over the original estimates," Cheeseman said. "And I suspect based on the prices we've gotten today, as a result of this tender, it's probably going to be higher than that again."

The total cost of second phase of the harbour cleanup was budgeted to cost $93 million, but is now forecast to cost $120 million. Cheeseman said the price could climb even higher.

According to city hall, labour costs in the St. John's area have increased 33 per cent since the original project estimates in 1999. That, coupled with the rising cost of steel, is to blame for the increase.

St. John's, and adjacent municipalities Mount Pearl and the Town of Paradise, which boast a combined population of 130,000 people, pump untreated wastewater into St. John's harbour.

St. John's city Coun. Keith Coombs, whois chair of the project's municipal oversight committee, the group made up of officials from St. John's and the adjacent municipalities, said the extra costs won't delay the project.

However,the cost overruns will fall to the three municipalities to share, he said.

"I don't think it means delays with the project," Coombs said. "I think it just that it means we just have to sit back say, 'OK, this is where we're going to get our portion, this is how we'll fund our portion of it and the other communities will have to do the same.'"

The federal and provincial governments are each contributing $31 million to the project, with the remaining money to be chipped in by the municipalities.