When it rains, it pours. The Saskatchewan Heavy Construction Association, instead, would prefer a steady and long-lasting shower to aid in the growth of the province. As the people of Saskatchewan are well aware, anything is better than a drought.
The short-term forecast calls for a potential flooding of the market thanks in large part to the recent announcement from the Saskatchewan Ministry of Highways and Infrastructure that tenders for upcoming projects reached a record $437.4 million in highway work. That's the largest total in Saskatchewan history.
As president of the SHCA, I was thrilled to hear the news. The provincial government deserves praise for delivering an early schedule and for its willingness to work with industry to deliver the work set to come out this year. I feel this a result of our association's lobbying to have the tender schedule released as early as possible.
However, there's cautious optimism with this inflated tender schedule.
Clearly, the government understands the importance of kickstarting the economy after it took a massive blow earlier in the year. Our industry plays a major role in the restart of the economy.
As we're well aware, early tendering is critical. More importantly, expediting the awarding of contracts is even more so to allow contractors to bid responsibly. Our members take on an extreme amount of risk during a routine construction season. But this year is anything but routine.
It is understood the bulk of this tender schedule includes most of the road construction work for the 2021 season. The spring tender schedule is expected to be considerably smaller.
Government stimulus money – and a lot of it – is on the way to several rural and urban municipalities in the province. The funding represents a $2-billion increase over the government's existing capital plan. The resulting projects are expected to support close to 10,000 jobs. More than $300 million of the funds are intended for highway projects, including surface upgrades, passing lanes, with almost $50 million dedicated to upgrades to municipal roads and airports.
The stimulus funding will balance the need for smaller, short-term projects to spark the economy and get people back to work. Longer-term, large-scale projects that leverage multiple sectors will make an impact over the next several years and beyond.
We're hopeful this financial support will aid our members who have been struggling and keep them busy for the foreseeable future.
The timing in how this abundance of work will hit the market is critical. Tenders need to be awarded quickly with as little delay as possible and that the work is sequenced in a slow drop rather than a downpour.
A quick procurement process will be the key to the industry's success or failure in the delivery of the program.
If we don't sequence that work in a manner where contractors can plan and bid responsibly then that's going to be a challenge because we'll then be faced with a capacity issue. The other thing is to make sure government understands the importance of awarding these contracts fast. The way the system is set up now, it takes anywhere from five to 20 days to award a project. If you triple the workload coming onto the market but internally the processes aren't tweaked to be able to expedite contract awards. . . that's going to be a real problem for our guys.
The uncertainty could wreak havoc with the labour force as well. As it stands, 75 percent of a contractor's workforce must come from Saskatchewan. Should out-of-province companies swoop in to take part in the feeding frenzy, those contractors could pull workers from other provinces.
We're aware much of the work will hit the market later in the year. But having an early gameplan helps in planning for the year ahead. There will be bidding on stimulus projects tendered by RMs, cities and towns, as well as by the Water Security Agency. This is why it's important that these upcoming projects are sequenced properly and integrated where possible.
The quicker we can get to work, the quicker we can get people back to work. Having this tender scheduled released early definitely helps.