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Cost to service west Orillia lands almost doubles; Project put on hold

$2.5M was budgeted for Infrastructure for employment lands in 2017, but bids for project were closer to $4.8 million; Mayor 'surprised' by price jump
west orillia business park project map
This map shows the location of the proposed expansion of the West Orillia business park that has been put on hold. City of Orillia graphic

The city has pulled the plug on plans to invest millions of dollars into infrastructure that would open up about 20 acres of much-needed employment lands in west Orillia.

At least for now.

In 2017, the city, during its budget deliberations, earmarked $2.5 million to put in the necessary services in the tract of land along the new Swinimer Drive, across from Rotary Place.

That money would be used to clear the land and install roads, sidewalks, hydro poles, water, waste-water and storm-water services that would pave the way for new industry.

However, when tenders for the project were received on Aug. 30, the lowest tender came in at $3.73 million. 

When utility costs, contract administration, inspection and geo-technical testing and other costs are added in, the total estimated cost of the project ballooned to $4.8 million - almost double the estimate.

As a result, staff did not award the tender, opting to reissue the tender in January in the hopes that a seasonal slowdown might compel bidders to lower their bids.

Orillia Mayor Steve Clarke said he was “certainly surprised” by how much the tender was above the 2017 estimate.

“One thing not just us but others are learning is the province is busy,” Clarke said. “There’s so much going on even contractors are having trouble getting trades and labour ... that means it’s not as competitive as” it is when contractors are looking for work.

So, instead of “letting the project go ahead, we’re going to re-tender in January when there won’t be as much construction going on. Hopefully companies will be able to sharpen their pencil.”

But it’s clear, the mayor said, that council will have to revisit the issue during budget deliberations.

“The reality is we’re going to have to allocate some more funding,” said Clarke. ”I do expect the tender value will come down … Hopefully, we can saw off somewhere in between.”

The delay could prove costly.

The mayor said there has “been a fair bit of interest in our employment lands.” 

Compounding the issue, about 36 acres of land in the Horne Industrial Park are being “held in abeyance,” waiting for the Ontario Energy Board to rule on the city’s pending pact with Hydro One.

If that deal is approved, Hydro One has, essentially, agreed to purchase almost the entirety of that park.

“As a result, this is 10 hectares of land we definitely want to put in play,” said Clarke.

While frustrated, Clarke said tenders for several projects have been less than expected, allowing the city “to return millions of dollars in the last few years.”

He said the investment, though higher than expected, will pay off.

“It’s not ideal to spend as much as the tender, but it does have to be done,” said Clarke. “As long as we can demonstrate a return on investment (in terms of jobs and tax assessment) it will make sense.”

He still believes in the project. “It just might delay the return on the investment by a couple of years.”


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Dave Dawson

About the Author: Dave Dawson

Dave Dawson is community editor of OrilliaMatters.com
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