VIDEO Deh Cho Bridge cost increases

The Deh Cho Bridge construction project in Canada's Northwest Territories is now expected to be CA$ 15 million (US$ 14.3 million) over budget, with a total price of CA$ 182 million (US$ 173.8 million).

The cost overrun arose from the redesign of the bridge, which caused a one year delay in the project, a year of lost revenue, and the requirement of new quotes for the final phase of construction.

Commenting on the revised price Minister of Transportation Michael McLeod said the Government of the Northwest Territories (GNWT) remains fully committed to the Deh Cho Bridge.

"A reliable year-round all-weather link to the south and improved transportation access to the North Slave region will provide economic benefits to the NWT for many years to come," the Minister noted.

With the bridge now 50% completed, the GNWT has taken steps to improve management of the project and to reduce uncertainty, said a GNWT statement.

The statement added that the GNWT has reached agreement with "an experienced project management team to put in place an effective project control structure to ensure the successful completion of the bridge project without further delays or unexpected costs".

Negotiations for a new general contractor are in their final stages, and it is expected that a new contract will be announced soon. This would allow the project to remain on track for completion by November 2011, and would satisfy a key expectation of the lenders, said the statement.

The Deh Cho Bridge is a joint project between the GNWT and the Deh Cho Bridge Corporation (DCBC). Under the project's Concession Agreement, responsibility for covering cost overruns falls to the GNWT, with DCBC responsible for reimbursing the GNWT out of its revenues from the project before it receives an enhanced return.

The bridge will replace the operations of the Merv Hardie Ferry and the Mackenzie River Ice Crossing currently at that location.

The bridge will be financed by the savings from the elimination of the ferry and ice bridge operation, a CA$ 2 million (US$ 1.9 million) annual contribution from the GNWT, and a toll on commercial vehicles crossing the bridge. Passenger vehicles will not be charged a toll.