Nanaimo works with firm to reduce cost of water treatment plant

NANAIMO – $5 million over cost mostly part of water treatment process.

Council approved a contract for the South Fork Water Treatment Plant Monday, but it will have to work with the winner to whittle down the winning bid amount.

Kenaidan Contracting Ltd. was the low bidder out of four proposals at $47,570,000 – $5 million over the city’s budget.

The two parties managed to reduce the bid to $45,849,600 (excluding GST), a $1.7 million trim, and will work to continue to find items to delete or defer from the tender price without impacting the treatment process.

“The contractor has experience with similar projects like this before where the design comes in over budget, or the tenders come in over budget, and they’re used to working with the clients, in this case the city, to get this more in line and closer to our budget,” said Bill Sims, manager of water resources for the city.

The second round of cost reductions is expected to take a few months and, according to a staff report, the areas in the tender that were above the estimate are all part of the water treatment process, such as mechanical, electrical and instrumentation.

Council direction to staff was required before the tender expired on April 6. The contract for the membrane equipment was awarded several months ago, and the pipelines that will supply the $65-million facility are almost complete.

Broken down, the water treatment centre, expected to be completed in 2015, will be paid for with $17.8 million from the federal Building Canada Fund; $17 million from the Community Works Fund; $5.3 million in development cost charges; $6.4 million from water rate revenues and reserves; and $18.5 million in municipal borrowing.