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February 23, 2006
(Transportation and Works)

Minister cancels tender

Transportation and Works Minister Trevor Taylor has canceled a recent tender call for $3.7 million worth of roadwork in his district of The Straits and White Bay North.

The only qualified bid received for this work, as a result of a public tender call, exceeded the budget for the project by $1.1 million.

"We estimated the value of this work at about $3.7 million, and the only qualified bid came in at approximately $4.8 million," said Minister Taylor. "The higher than anticipated cost is an issue, but the fact that we received only one qualified bid is also a major concern."

While two bids were actually submitted, one was disqualified due to errors in the companyís tender proposal.

Government announced a $60 million roads program in November 2005, well before the 2006 Budget. The purpose of the advance budget approval was to tender projects early and to give the industry time to plan and take full advantage of the construction season.

"The early budget approval does not appear to be achieving the intended purpose," said Minister Taylor.

"We only received one qualified bid on the project in The Straits and White Bay North. For an earlier tender call in the St. Barbe District we received only two bids. The combined value of these projects is about $8 million, or 13 per cent of our total roads program for the year. We donít understand why more companies are not bidding to create a more competitive environment. Itís a major concern I will be taking up with the Road Builders Association."

Minister Taylor also expressed concern over wide swings in the cost of road materials. For road projects in the St. Barbe District, liquid asphalt was bid at a certain price per ton. Less than a week later in the adjacent district of The Straits and White Bay North, liquid asphalt was bid at a price which was $160 per ton higher.

"The market price of liquid asphalt, a petroleum-based product, did not increase by $160 per ton in less than a week," said Minister Taylor. "Why there would be a 40 per cent difference in cost of liquid asphalt between two projects of similar size in the same region of the province is curious indeed, and demands that government look very closely at the market and price structure for this product."

With regard to the cancelled tender in The Straits-White Bay North, Minister Taylor advised that a new public tender will be called. "We will have to revise the scope of the project, and perhaps adjust some conditions of the tender, with a view to attracting some more competitive bids next time out."

Media contact: David Salter, Communications, (709) 729-3015, 691-3577

2006 02 23        5:30 p.m.

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