The governments of the U.S. and Canada each started a journey to invest in infrastructure in response to the global economic crisis several years ago.
Looking at the United States today, a nation plagued by an election year, neither presidential candidate has a strong stance on infrastructure — at least one that’s discernable from their campaign materials. Anyone who has followed U.S. politics in the slightest knows this is one of many topics that get lost in a sea of divisive social issues.
In reports forecasting the market for Canadian and U.S. infrastructure construction between 2010 to 2015, the compound annual growth rate is higher for Canada, though the U.S. markets are often forecasted to be worth double or triple the value of their Canadian counterparts.
In 2009 both countries’ governments enacted spending plans to stimulate economic growth during the recession. For example, Caltrans, the California transportation agency, received USD 180M toward its USD 391M Caldecott Tunnel project through the American Recovery and Reinvestment Act.
Canada’s Economic Action Plan funneled money into infrastructure, such as the 11km Evergreen Rapid Transit Line in Vancouver, a project estimated to cost CAD 1.4bn with up to CAD 417M coming from the government of Canada. The project includes 2km-long twin bored tunnels, each tunnel with a diameter of about 6m. The Evergreen line is being procured under a design-build-finance contract, and is currently at the RFP stage, with the three shortlisted teams (EL Partners, Kiewit/Flatiron Evergreen Line, SNC-Lavalin) in the process of preparing proposals.
A report by the Construction Intelligence Centre (CIC) on the U.S. market for construction equipment found that the tunneling and drilling equipment category registered growth of 32.9 per cent in 2006, after which growth declined, including decrease of 6.4 per cent and 14.1 per cent in 2008 and 2009 respectively. However, it should be noted, the tunnelling and drilling category was the second largest at 17.1 per cent of the market, in 2009, valued at USD 3.04bn. The CIC forecasts tunnelling and drilling will grow to USD 4.4bn in 2015.
The matching report for Canada finds that the tunnelling and drilling equipment category had a USD 29.2M turnover in 2009, an increase of 9.7 per cent over 2008. Forecasts for 2015 expect a turnover of USD 31.3M in 2015.
Are the respective stimulus programs working? It depends on your political party affiliation. According to equipment sales, money is flowing somewhere. In the U.S. the tunnelling industry has since seen mega projects like the Alaskan Way Viaduct bored tunnel replacement, worth USD 1.35bn, awarded.
However, the global economic crisis didn’t even register with Tunnelling Association of Canada (TAC) president Rick Staples, in his comment for the inaugural issue of the TAC’s new official magazine, Tunnels North America. He admits Canada’s geographical position and associated climate can present challenges to underground construction. However, the tunnelling industry continues to grow and thrive.
The bedrock of the Canadian Shield contains some of the oldest, hardest rock in the world, while past glacial eras have produced extremely variable soft ground conditions, particularly in urban areas where underground infrastructure improvement is usually undertaken.
"This recent growth in the volume of underground work has challenged our industry to adapt and cope with the huge demand for tunnel personnel, at all levels of expertise. Contractors, engineering consultants and even owners are all struggling to find qualified personnel for many of these projects, while the competition to find experienced staff has become an international exercise."
Foreign contractors are leaping at the opportunity to work in Canada. Austria’s Strabag has taken on the mammoth 10.2km Niagara Falls tunnel, where lining is currently being installed and completion is expected in 2013. With the hydro project cementing their Canadian presence, Strabag has since secured a CAD 290M (USD 296M) contract to build a 15km wastewater tunnel in the Toronto area.
The Greater Toronto Area is a beehive of activity as multiple tunnel projects have moved into the construction phase. A joint venture of Spanish contractor OHL/FCC is building the North Tunnels for the Toronto York Spadina Subway Extension (TYSSE) in Ontario. The South Tunnel contract went to a joint venture of Canada companies, Aecon/McNally/Kiewit. The TYSSE is an 8.6km-long extension of the existing Toronto Transit Commission (TTC) Spadina Subway line into the City of Vaughan in York Region. The project includes 6.7km of twin bored tunnels. When in full swing, these two projects will have eight EPMs in operation concurrently.
Metrolinx, the transportation authority for the Greater Toronto Area, has awarded the first of two tunnelling contracts for the Eglinton-Scarborough Crosstown light rail project, worth CAD 320M (USD 328M) to Crosstown Transit Constructors, a joint venture of Obayashi Canada, Kenny Construction, Kenaidan Contracting and Technicore Underground. The JV will build a 6.2km of the 11km-long tunnel project. The total price for the 19km light rail project is expected to be CAD 4.6bn (USD 4.7bn).
In this report, Tunnels looks at the major projects drawing talent and equipment from around the globe.
