Sun
Twenty years from now, no one may care anymore that the cost of the Vancouver Convention Centre expansion increased during construction by more than $200 million.
By then, we hope British Columbians will have enjoyed the benefits from attracting tens of thousands of visitors to the waterfront facility and the pain of the cost overruns will be long forgotten.
Right now, however, we have to be concerned about the hubris displayed by Premier Gordon Campbell in selling the deal and what that might mean for the billions in construction under way or planned for the 2010 Olympics and beyond.
There is no suggestion at this point that the convention centre will rival the fast ferries as a boondoggle since it should have significant value when it is completed.
But as the budget balloons to $800 million, with no fixed price yet for 20 per cent of the construction, the convention centre will soon be vying for entry into B.C.’s Hall of Fame for Runaway Budgets.
The $800 million does not even include the $73 million written off in 1999 by the New Democratic party government for the earlier convention centre project known as Portside that never got past the planning stage.
Given the inflationary construction environment in Vancouver in the past three years, it’s not fair to immediately conclude that this project is being mismanaged, although we are glad to see that the auditor-general has been asked to look at the books.
What is clear, however, is that the partner responsible for any cost overruns — the provincial government — failed to prepare a realistic budget for this mammoth project.
When the deal to build the convention centre expansion was announced in December 2003, it was projected to cost $495 million, with $90 million coming from the tourism industry and the federal and provincial governments each kicking in half of the rest.
By the time the ground was broken almost a year later, the budget had already grown to $565 million.
Campbell assured reporters that was enough to build the convention centre on time, on budget.
“Count on it,” he said. “There are contingencies built into the project and it’s going to be run professionally.”
It was the same assurance he showed a month later when the Richmond-Airport-Vancouver rapid transit line project needed an additional $65 million from the province to get started. Would that be all?, Campbell was asked. “That’s it,” he agreed. “Kaputski. Done.”
Hopefully, with the rapid transit line, now called the Canada Line, taxpayers will be insulated from cost overruns because it is being built by a private partner under a fixed-price contract.
The province tried to get a private partner to build and operate the convention centre. No one was interested.
With hindsight, we should have wondered what private enterprise knew that the provincial government didn’t.
© The Vancouver Sun 2007