Fuel price escalation remedy proposals on the table
The MHCA has received industry feedback on a provincial proposal to adjust for costs attached to fuel prices, which have risen substantially since January.
The proposal would see adjustments made depending on the rise or fall of fuel prices, and on when bid prices were submitted for provincial construction and bid-hourly heavy construction projects.
“We have received industry feedback on what Manitoba Transportation and Infrastructure has proposed in a fuel price adjustment clause; the structure looks workable but we’d like to see some tweaks to ensure the clause works and considers not just work that is coming but that has been done or bid upon already,” MHCA Chris Lorenc said.
An MHCA fuel price sub-committee was struck in February when fuel prices began rising steeply, in reaction to the Russian invasion of Ukraine. The diesel price differential – as much as 50 cents a litre or more, depending on the time-frame of the tendered work – put industry in a position of losing money on work, especially in the bid-hourly tenders such as snow clearing or, potentially, flood control.
The sub-committee is cognizant of the need to reflect in any proposal the fact fuel prices are expected to fluctuate, and that such a clause provides for price decreases, as well.
The impact of the fluctuating oil prices is also being considered. The sub-committee is also working with the City of Winnipeg regarding a fuel price adjustment clause on municipal heavy construction tenders.
“This issue has come complicated considerations and we want to come out of these discussions with a resolution that fits the variety of circumstances – including when unpredictable world events trigger unforeseeable spikes — and for various elements of the industry work,” Lorenc said.
