Private-sector Bids Drop 20 Per Cent in Paving Plant's First Year

The province is doing more than providing safer roads for Nova Scotians to travel with its mobile asphalt plant. More competition and better pricing from the paving industry have generated significant savings and allowed more roads and highways to be resurfaced.

Senior staff from the Department of Transportation and Infrastructure Renewal appeared before the Public Accounts Committee today, Feb. 27, to answer questions about the plant.

"We thought long and hard before deciding to invest in an asphalt plant for the province, knowing there would be concerns about the potential impact on the private sector and overall costs to the province," said Transportation and Infrastructure Renewal Minister Maurice Smith.

"Today was a good opportunity for staff to make people aware of the benefits of the plant, the crew, and all the good work they did over the summer, especially the savings we achieved and how that translates into the province paying less and paving more."

Highlights from today's meeting include:

• During the three-year period from 2007-2010 the average price for asphalt was $59. In 2011 and 2012, the average price dropped to $45, representing a total of $20.8 million in savings. The reduced price helped the department repave about 75 more kilometres of roads on the 5 Year Plan this year, earlier than planned.
• The number of bids per contract have increased, showing increased competition. In 2009, there were 230 bids on 90 contracts from the private sector. In 2012, there were 299 bids on 80 contracts. The increased competition generates savings.
• Of the $281 million invested in highway, road and bridge construction in 2012-13, $6 million of the work was done by the province's asphalt and chip seal crews.
• In the last 10 years, more than $2 billion has been invested in the provinces roads, highways and bridges. About $2.2 billion of the work flowed through the private sector. The province did the remaining $7 million or 0.3 per cent.
• The province is also working to issue tenders earlier to allow the private sector to get the crews and equipment they need. In 2012-13, 12 tenders were advertised or awarded before Feb. 23, 2012. Total bid value was $30.7 million. In 2013-14, 27 tenders were either advertised or awarded before Feb 23, 2013 with a total estimate value of $68.4 million.

Staff explained to the public accounts committee that investing in the asphalt plant allowed more efficient use of equipment such as trucks and loaders. It also allows them to be a more knowledgeable consumer so they better understand the business.

"We have a responsibility to the public to ensure the investment we're making in the province's infrastructure is well spent and prices are fair," said Mr. Smith. "Owning our own plant to do a very small portion of the overall work that needs to get done allows us to do just that."

The province purchased the asphalt plant for $3.6 million. More than 600 kilometres was paved or resurfaced during 2012-13, 100 kilometres more than planned.

The total highway capital budget for 2013-14 is $245.8 million. Additional operational funding for highway maintenance will be made available as part of the 2013-14 budget.

The 2013-14 5-year Highway Improvement Plan is online at http://gov.ns.ca/tran/highways/5yearplan . Planned provincial road improvements are also available on an interactive map at http://gov.ns.ca/tran/highways/5yearplan/2013_14Content.asp.