Convention Centre Cost Overruns

As any PR person will tell you, when you want to publish good news, put out a release on Tuesday morning. If you want to bury a story, release it on Friday - preferably late in the afternoon.

So it should come as no surprise that the latest bad news about the Convention Centre expansion project came out last Friday.

(Link to Vancouver Sun article here).

Essentially, the project is now set to cost about $800 million, 'more than 40% over its original budget' of $565 million.

Furthermore, the completion date has now been pushed back from November 2008 to March 2009, although this will still allow enough time to set up the international broadcast centre for the Olympics.

The two main factors behind the cost overruns and delays - escalating construction costs due to the current building boom, and unforseen soil problems with the waterfront pile-driving.

Now, not to excuse what appears to be the fault of poor contingency planning, but there seems to be another side of this equation that is going under-reported - that is, the same economic boom that led to rising construction prices has also contributed to increased government tax revenues.

Put another way - we can better afford these cost overruns today, than we could when the project was initially announced five years ago.

Should BC taxpayers be concerned about the cost overruns? Yes. Should they be as upset as some will insist they should be? Probably not.

Comments

[marto]

Comparisons between the Convention Centre and the Fast Ferries are ridiculous.

The Fast Ferries were cheaply built, and the whole program was incompetently managed.

As a result, there was no return on the investment that we put into them.

Despite the escalating costs, the Convention Centre will still pay for itself, thanks to the convention business it will bring to the city over the next 25+ years.

By contrast, how many Fast Ferries did we sell?

If anything, there is a danger that if they try to save cut too much from the Convention Centre budget, we'll have a cheap-looking facility, which could scare away future business.

Let's hope they build it right, not cheap.