The City of Ottawa will use a $23-million performance bond to see the construction of the Strandherd-Armstrong Bridge through after declaring the general contractor, ConCreate USL Ltd., in default of its obligations.
ConCreate was named in receivership papers filed earlier this month, citing $34.6 million owed to creditors.
The bridge is 60 per cent complete and was already behind schedule when news of the receivership became public last week.
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“This decision follows discussions with the contactor’s court-appointed receiver and the city’s bonding company,” the city stated in a press release issued late Friday.
“It is being pursued as the best course of action to ensure the project continues to move forward and is completed as quickly as possible.”
The city also hinted at further delays to the bridge, which was originally expected to be finished in early 2012 and more recently, by the end of this year.
“It is important to recognize that situations such as this create schedule setbacks and will impact construction,” the city stated.
“However, the action taken by the city … is geared to limit any project delays and will allow the bonding company to assume responsibility for the delivery of the project regardless of what happens with the contractor as a result of it being placed into receivership.”
According to city official Wayne Newell, performance bonds are a standard feature of construction contracts. This bond provides an extra 50 per cent to the original contracted price to allow for changes in contractors and other possible costs.
As late as Thursday afternoon, construction on the bridge was proceeding under the purview of receiver Grant Thornton, said Mr. Newell, the city’s general manager of infrastructure services.
“They’re still working at the site, and that includes the subcontractors on the site,” he said in an OBJ interview last week.
The $45.2-million bridge is intended to provide a shorter route between the communities of Riverside South and Barrhaven. The federal and provincial governments are each funding a third of the bridge costs.
A delay in construction will not hurt merchants in Barrhaven since there are 70,000 locals already using the stores, said Andrea Steenbakkers, its BIA executive director, last week.
She also expressed confidence that the project’s importance to Ottawa would help it move forward regardless.
“I do think the project is a priority to the city as well as to the federal government, so we’re pretty confident that there won’t be too much of a delay,” she said in a Thursday interview with OBJ.
