Mountain View County has found a silver lining in Alberta’s economic storm clouds.
The previous red-hot economy had left many communities tearing up their construction budget estimates as the competition for builders pushed prices through the roof.
But the more recent financial chill is paying off for communities embarking on major projects.
Mountain View County announced recently that it will save more than $5 million on a 10-km paving project for the Red Lodge Road just west of Olds. Initially priced at $12.7 million, the project is now expected to come in at $7.6 million, and it will be completed in 2010, a year ahead of schedule.
County director of operational service Steve McInnis said a sharp drop in the price of asphalt over the last 18 months is the major reason behind the change.
In a September 2007 estimate for the project, asphalt was priced at $120 per tonne. But when the winning tender was chosen earlier this year, asphalt costs were down to $65 a tonne.
In another sign of the changing economic times, there were 11 companies bidding on the project. Many municipalities struggled to lure more than a handful of bidders to infrastructure projects during the height of the boom. In some cases, no bidders could be found.
“It’s unfortunate the economy is the way it is,” said county Reeve Al Kemmere. “At the same time, we were able to catch some of the savings and pass that on to the taxpayers.”
In light of pricing, the county is also considering adding another three km of paving work to the project.
Lacombe County’s director of operations Phil Lodermeier is also keeping a close eye on asphalt prices to ensure the municipality is positioned to take advantage of competitive pricing.
The county has a paving schedule for its roads, but when the prices are right, more work is tendered. This year, the county undertook a major $8-million paving project in the Alix area to take advantage of falling prices, he said. Another $6-million paving program is planned for next year.
When prices are high and projects are scaled back, the county continues to put aside money in a paving reserve so the cash is there when needed.
Red Deer County didn’t waste any time taking advantage of pricing. This spring, the municipality rolled out a massive $8-million road paving program and accelerated a 10-year asphalt maintenance program by eight years, said Frank Peck, the county’s director of operations.
Contractors put asphalt overlay on 70 km of roads.
“In municipal, that’s huge,” said Peck of the county’s project list. In past years, only a few kilometres a year were resurfaced.
Peck said some more projects will be added to the list for next year, but the goal of getting a lot of work done when the price was right has been accomplished.