11 Mar Of course Industry can pave cheaper than government. But they don’t.
Province accused of sweetheart dealing — Halifax Metro
NDP accused of wasting cash — Chronicle-Herald
Chamber: Paving bill will go up — Chronicle-Herald
Road builders want government out of paving — Halifax Metro
Ideology on the road — AllNovaScotia
A sophisticated lobby by the province’s paving contractors appears to have hornswoggled the Halifax media.
Correction: the lobby isn’t all that sophisticated. Half an hour’s research would have debunked the contractors’ claim that socialist ideology trumped common sense in government’s decision to buy and run its own paving plant.
In various forums, the road-builders have argued the province can’t possibly pave roads cheaper than they can. There’s but one problem with this argument: No one disagrees.
The question isn’t how cheaply the the private sector could pave Nova Scotia highways. The question is whether government tenders for paving work are eliciting competitive bids. The evidence, available on the Transportation and Infrastructure Renewal website, shows they are not.
In the 2008 and 2009 construction seasons, 72 paving tenders drew only two bids. Ten tenders drew only one bid. A report [pdf] prepared for the province’s Chief Engineer for Highway Programs, shows paving projects in counties where bidding is competitive drew an average asphalt price of $49.02 per tonne, while tenders in non-competitive counties drew average bids of $54.91 — a 9.7 percent premium.
In some parts of the province, the problem was extreme. A tender in Yarmouth produced a low bid of $64.50. One in Digby yielded $79.20 per tonne.
The paving industry in Nova Scotia consists of a single 500-pound gorilla — Halifax-based Dexter Construction — and several local outfits scattered around the outback. The small, family-owned shops may be loathe to bid on projects in Metro, lest the gorilla retaliate by muscling in on their own home turf. Some say this happened a few years ago, and nearly put a local contractor under.
No doubt all these companies could pave cheaper than government. The question is what will it take to get them to do so. We have a crappy climate for pavement, and a lot of roads to maintain. If the province wants to get the best value for its paving dollar, having a plant in its hip pocket might be just the ticket. The Canadian Taxpayers’ Federation, of all groups, ought to be able to understand that.