Imagine you’ve hired a contractor to build you a house. He says it’ll cost around $280,000. A few years later, before he’s even started building the house — or, worse, perhaps, he has, but only the garage — he announces that the estimate has gone up. It’ll now cost you somewhere north of a million dollars. He can’t say exactly how much. You ask him what changed. “Supply chain and COVID,” he says, shrugging, because that’s always the easy answer. “And there were some extra development fees.” A moment later he adds: “Oh, and I also made some changes to the plans.” The Ottawa Citizen’s best journalism, delivered directly to your inbox by 7 p.m. on weekdays. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of The Evening Citizen will soon be in your inbox. We encountered an issue signing you up. Please try again Interested in more newsletters? Browse here. “I’ll have to get back to you on that,” he says. Welcome to the Wonderland economics of The Ottawa Hospital’s new Civic campus, where a project once expected to cost $2.8 billion now apparently requires a provincial contribution approaching $10 billion and where the province is providing all the clarity of a kindergartener explaining why there are no cookies left. As colleague Sabrina Bedford reported recently , Infrastructure Minister David Piccini blamed supply-chain problems and municipal fees, including development charges, for the increase. The Ministry of Health, meanwhile, says the project’s scope has changed. Changed how? Are we getting more hospital? Will every patient get a private room? Does it now include a salt-water aquarium? Will our LRT include mobile medical cars? Probably not, but here’s the thing: We don’t know. Orléans Liberal MPP Stephen Blais perfectly described the province’s flailing explanations: “Once the right hand started talking to the far-right hand in the government, they came up with the line about geopolitical realities and COVID, etc.,” he said. Blais also took Piccini’s remarks to task. “When I asked him what was driving the cost increase, he basically said municipal timelines and development charges. But there’s no city development charge that’s collecting billions of dollars. Otherwise, the city wouldn’t have a financial problem.” Certainly, construction costs have risen. But the tender process began in 2022, when the pandemic’s effects on supply chains were pretty well known. Meanwhile, the newly reported $10-billion figure isn’t even the hospital’s total cost. That’s just the province’s share — almost five times the $2.1 billion initially projected. If you were to estimate an overall cost based on what the province says it now expects to ante up and the portion it expected to cover of the initial $2.8 billion — that is, if you do the math — you might expect the new hospital to cost more than $13 billion. To be fair, building a hospital is much more complicated than building a house, and that original $2.8-billion estimate wasn’t a fixed-price bid. The province put the project to tender in 2022 and only one bidder — a consortium of PCL and EllisDon construction companies — came forward by the October 2023 deadline. Under what’s known as progressive procurement, the specific details of the job, including cost, are worked out later. The goal of the progressive model is to bring in private-sector partners during the design phase and have both sides work together on the project requirements, design, pricing and risk before entering into a final agreement. A contractor might, for example, identify design problems before construction begins, and suggest cheaper alternatives. All well and good, I suppose. But surely there’s a limit to how much taxpayers should be expected to swallow without an explanation. Should we be concerned that the government is now negotiating the details of this enormous project with a singl
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