The private sector provides hot-mix asphalt for paving and for patching to the City of Winnipeg at very competitive rates due to the efficiencies inherent to industry work and production, something a city-owned plant could not replicate, MHCA President & CEO Chris Lorenc told City Council May 30.
Lorenc appeared at Council, encouraging it to reject a motion that called for the City to establish its own asphalt plant.
The motion, presented by Coun. Russ Wyatt, asserted that the City is at the mercy of the private sector, paying inflated prices for poor service as the heavy construction industry prioritizes its needs over those of the City, the motion said.
“None of the motion assertions that pricing is “exorbitant” to feed “significant profit margin” is evident in any facts,” Lorenc said. “The City, in fact, gets hot mix asphalt competitively. Why? It’s about economies of scale and efficiency.”
Further, the contracts with the private sector are open, transparent and are awarded based on lowest qualifying bid. There are six asphalt contractors supplying to the market, which is significant for a city of this size.
As to the assertion that the City is at the “mercy” of industry regarding timeliness of supply, contracts include strict clauses on when asphalt must be supplied, with delays triggering substantial penalties.
The City would have to invest approximately $5 million, upfront, to set up an asphalt plant, then add in operational and maintenance costs. Tonnage can be sourced from private operators much cheaper, Lorenc said. (To read the full presentation, click here.)
The Wyatt motion was not expected to receive Council support.
Lorenc discussed his presentation with the MHCA Executive Committee, at its meeting May 29, and was one of a number of advocacy priorities discussed.
Also discussed at the meeting were:
the Mines Branch has been informed of significant delays faced by industry in applications for quarry/pit licences and payment for completion of quarry rehabilitation projects.
A working group with Manitoba Transportation & Infrastructure and MHCA representatives will meet in early June to continue discussions regarding the delivery of the highways capital program, including timely tender advertising and the government’s decision to use an alternative bid evaluation process for some projects.
this follows upon a meeting MHCA had with Finance Minister Adrien Sala concerning the government’s decision to halt the policy of carrying over unexpended funds to the subsequent highways capital program budget.
MHCA and the Winnipeg Construction Association will meet with Labour Minister Maya Marcelino regarding the establishment of a review panel to update elements of the Construction Industry Wages Act. The Heavy Construction Minimum Wages schedule will be reviewed.
Meetings with senior MTI offices confirms the department will be following the prompt payment rules embedded within amendments to the Builders’ Liens Act.
