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Construction continues at the Olympic Athletes Village near Science World in this photo taken February 8, 2009 in Vancouver, British Columbia. Vancouver will host the 2010 Winter Olympics which are scheduled to begin February 12, 2010.<br>
Don Emmert/AFP/Getty Images

Cost overruns continue to plague Vancouver

The Globe and Mail
By Frances Bula and Rod Mickleburgh, The Globe and Mail Posted Monday, June 15, 2009 10:11 PM ET

Olympic-related construction bills continue to soar over budget for beleaguered Vancouver taxpayers, with some estimates putting the total added costs at close to $45-million. That's apart from the troubled Millennium Project to house Olympic athletes, which is over its original budget by more than $100-million and has had to have its financing taken over by the city.

Not even the city's own project office set up to oversee the Millennium development has proven immune from cost overruns.

Among millions of dollars in other extras to be approved this week, Vancouver City Council will be asked to cough up an additional $1.3-million to keep its Olympic village project office operating on the south shore of False Creek.

"It's quite unbelievable that the office which has apparently been in charge of managing that project has itself been out of money for a long time," said Councillor Geoff Meggs after a municipal manager report on the latest funding problems was released late yesterday.

The report, which deals only with projects on the site of the Olympic village, asks council for money to make up previously announced shortfalls of $15-million for 250 units of affordable housing, $5.5-million for added construction costs for the on-site civic centre, including an increase of $1.3-million in just the last four months, and the project office's budget boost from $3.5-million to $4.8-million.

As well, the report outlines a huge increase of more than 100 per cent in the price of restoring the heritage Salt Building at the centre of the Olympic village, from $6.5-million to $15-million.

Previous overruns at Olympic venues built by the city have totalled at least $14-million, sources indicated, yielding a rough estimate of $45-million in total over-budget construction costs. That is apart from the high-profile multi-million-dollar debacle engulfing the Millennium development.

"At the Olympic village, the only project in the entire development that's on budget is the energy utility. Everything else is over budget by double digits, by tens of millions of dollars," Mr. Meggs said.

"It's really an indictment of the lack of oversight by the last council."

Singling out the Salt Building as an example, city manager Penny Ballem said she is unclear how the previous administration got to the point where the cost overruns were so high, but the city has no choice now but to finish it in time for the 2010 Olympics.

"The city is paying for all this, because that was the process that was set up in the past," Dr. Ballem said. "It was sort of a combination of things and, by the time it was brought to tender this past January, we were in the run-up to the Olympics."

The Salt Building, now owned by the city, was built around 1930 to refine raw salt. When finished, the structure will become a brew pub operated by well-known restaurateur and bar owner Mark James.

Part of the high costs for the building have come from efforts to retain certain heritage aspects. The building was moved slightly from its original position and lifted. A new basement was added, and original beams underneath the old salt will be lit up to show them off.

Despite the report, Dr. Ballem said that she is still unable to calculate the final bill for the complete Olympic village development, since some extras are being left out for the time being. "My first emphasis is to get it delivered for VANOC. We are really grinding on this to get it done."

The manager's report asks council to approve $21.9-million in additional funding to ensure that all "time-sensitive projects" are completed "without delay." Despite all the difficulties, the report said that the South East False Creek venues are on course to be completed by the end of October, when they must be handed over to VANOC for the Olympics.

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