Increased costs of construction materials and land procurement are behind a sharp increase in the price for a flyover at the intersection of the Patricia Bay Highway and Keating Cross Road, according to the Transportation Ministry.
Since the project was announced in 2019, the budget has ballooned to $76.8 million from an estimated $44.3 million because of factors including the increased cost of structural steel and other materials, the ministry said in a statement.
Other factors it cited include “challenging” geotechnical conditions that have required a more complex design, increased property acquisition costs and a larger contingency for unpredictability in the market.
The province is covering $57.6 million of the total project cost, with $16.7 million coming from the federal government, and Central Saanich contributing $2.5 million.
The funding commitments from the municipality and federal government have not changed since 2019.
Rory Kulmala, chief executive of the Vancouver Island Construction Association, said projects everywhere are facing budget pressures as prices for construction materials have increased from 40 to 50 per cent in the last two years, fuel costs 145 per cent what it did pre-pandemic, and lumber has doubled in price in the past five years.
Kulmala said projects are also being squeezed by high B.C. land prices, especially in places like Victoria and the Lower Mainland, while labour costs have continued to rise.
“It’s a labourer’s market right now — we can’t find workers. Our sector is paying top dollar to attract and retain workers from everywhere else in Canada,” he said.
With costs soaring, Kulmala said some private developers have been wondering if it might pay to wait.
“They’re not necessarily waiting to see if the prices of commodities are going to become cheaper — they’re waiting so that maybe the labour becomes a little more abundant and they can get their project done in a more timely fashion,” he said. That may help them save on financing costs.
When it comes to public infrastructure projects like the Keating flyover, however, Kulmala said the province has little choice but to pay what it costs.
“The reality is they’re responsible for our public infrastructure and we need to invest in it, we need to continue to have a high standard of care for our public infrastructure.”
The Highway 17 and Keating Cross Road project will replace the northbound left turn onto Keating Cross Road with a separated flyover overpass, designed to improve access for businesses and neighbourhoods, and make the highway safer.
The project will also realign the southbound on-ramp to Victoria, widen Keating Cross Road and add sidewalks.
The ministry said the final design is nearing completion and the project tender is expected to be posted this fall. Construction is expected to be complete by spring 2025.
