N.S. starts paving business

The Nova Scotia government laid out its justification Tuesday for getting back into the paving business after 18 years away, saying the province could save millions by doing some projects on its own.

Transportation Minister Bill Estabrooks said his department was making the move to address unfair pricing and a lack of competition for project tenders in some areas of the province.

"We've heard all along there's lots of competition, we've heard all along these are fair prices," said Estabrooks. "Well, we don't consider that's reflected in the tenders that we've received."

Prices have been affected in parts of Cape Breton and southwestern Nova Scotia, he said.

The cost for provincial involvement includes $6 million to buy and run a mobile asphalt plant in 2012. Another $2.6 million will be spent to buy equipment and operate a 26-member road resurfacing crew starting in May.

Officials say the money will come from existing funds in the department's budget.

In the upcoming construction season, the province expects to pave about 300 kilometres of road. Estabrooks said about 90 per cent of road work would remain in the hands of private companies.

Bruce Fitzner, chief engineer for the Transportation Department, said the province estimates it could save up to $4.7 million a year by doing the work itself.

Fitzner said the lack of competition had resulted in chip sealing prices a process that uses rock chips and liquid asphalt to repave roads that were much higher in Nova Scotia compared with neighbouring New Brunswick, which already operates several paving crews.

The department provided figures from 2008-09 showing that the tendered cost in Nova Scotia to resurface a kilometre of paved road was $32,500. In New Brunswick the tendered cost was $16,600, while work done by provincial crews came in at $15,100 for one kilometre of road.

Paving best left to private sector: opposition

Fitzner said the department's analysis concluded the province could resurface paved roads for $18,600 per kilometre.

"We wouldn't be able to get down to New Brunswick's prices right off the bat, but hopefully over time they would go down even further," said Fitzner.

The province's unfair pricing charge was rejected by Grant Feltmate, executive director of the Nova Scotia Road Builders Association.

"I've yet to actually see detail on any particular tender," said Feltmate.

He said the comparison with New Brunswick wasn't applicable because road building standards are more rigorous in Nova Scotia, meaning higher costs for road contractors.

"If the department did chip sealing at the same spec it would cost them a ton more money than New Brunswick and they'll quickly see that their costs are much higher than they are anticipating," said Feltmate.

Liberal Leader Stephen McNeil dismissed the government's decision, saying it should stay out of a business that's best left to the private sector.

"The wrong way to go is to spend millions of taxpayers' dollars to compete against the private sector," said McNeil.

He said competition on pricing would improve if the province did a better job of getting the bulk of its tenders out ahead of the spring construction season. With budget restraint coming in New Brunswick, McNeil said more companies will be looking for work in Nova Scotia.

"We are lined up to have some of the most competitive pricing in this province for paving without government spending a dime," he said.