Yellowhead Trail freeway conversion project faces $105M shortfall

As budget deliberations continue at Edmonton's city hall, councillors are casting a critical eye on major infrastructure undertakings like the Yellowhead Trail freeway conversion project, which will cost over $100 million more than expected. 

The project will turn the expressway into three lanes of free-flowing traffic in each direction on the Yellowhead Trail from St. Albert Trail to 97th Street.

Due to the size of the project, it is being tackled in various phases but city council said Tuesday that approach is proving to be costly. 

The $1.1 billion project has a forecasted shortfall of $105 million — more than the $1 billion projected in 2017.

The city says primary cost drivers from 2017 to 2024 have included inflation, land acquisition, increased co-ordination with the CN railway and larger utility servicing requirements.

"I understand completely that 10 per cent over budget is not ideal," Ward Anirniq Coun. Erin Rutherford told media on Tuesday.

"But when you look at it in the context of what was estimated in 2017 and the inflationary and cost pressures that we've experienced between then and now, 10 per cent is actually still fairly good," said Rutherford, whose ward includes St. Albert Trail and 97th Street.

Council passed a motion in February 2015 designating the freeway upgrades as the city's priority project under the National Infrastructure Component of the federal government's New Building Canada Fund. 

Mayor Amarjeet Sohi, who was federal infrastructure minister at the time, said the funding distribution decided upon was that the federal, provincial and municipal governments would each fund one-third of the freeway program, but that didn't happen.

"The end result is 50 per cent of the cost is being paid by the city, 25 by the province, and 25 by the federal government," Sohi said. 

 "So there might be opportunity for us to engage back with those two orders of government to see if they can increase their share of the cost."

Sohi said talks are already underway with the federal government. 

"One conversation that I had with the current minister of infrastructure at the federal government, is there a flexibility for them to look at actual tender cost and then break that cost on one-third/one-third cost-sharing," Sohi said.

"I think that will be a more prudent approach to actually have the proper cost-sharing based on more reasonable and more predictable cost of the projects, instead of just a preliminary cost, which is always lower, and the tender price is usually higher than what we budgeted for."

In an October statement, a spokesperson for the Ministry of Transportation and Economic Corridors said it is investing $2.2 billion over three years in road and bridge construction projects and municipal grants, which includes more than $240 million for upgrades to Yellowhead Trail.

Yellowhead Trail is part of the Trans Canada Yellowhead Highway, a core transportation route for moving goods across four western provinces.

Yellowhead Trail is a 25-kilometre section of road that currently includes 10 interchanges, eight signalized intersections, as well as various non-signalized intersections and private property access locations. 

"This is a very important corridor from a trades point of view, a safety point of view, movement of goods and services in the city, the traffic volumes continue to grow on Yellowhead," Sohi said about the critical need to improve the Yellowhead despite the cost overrun. 

"Maybe this contract should have signed all at once instead of breaking into phases. Now we have a higher cost ... at the end of the day, it's an inflationary pressure of 10 per cent over the overall cost of the project that we have to have to manage and we need to get this project done." 

Rutherford said the financial risk of not proceeding with Yellowhead is "way more significant than the $105 million that we would need to take on in additional debt funding to see that vision through."

She said traffic safety has been a big consideration.

"Some of those intersections, like 149th Street, were some of the highest fatality intersections in our city at that time, and so there is an investment there in terms of safety as well."

Budget deliberations continue until Thursday as city administration is asking for council to fund the freeway project through the upcoming budget or risk cancelling the priority project.