Digging the hole deeper

When the University unveiled plans for the Queen’s Centre in 2004, it budgeted $230 million for its construction. Phase One was supposed to csot $124 million, Phase Two $83 million and Phase Three $23 million.

The project has already cost $165 million, putting it $41 million over budget for Phase One, which isn’t scheduled for completion until fall 2009.

The University used “value engineering”—the substitution of cheaper construction materials and techniques—when planning the Queen’s Centre in an effort to keep costs down. Despite saving $20 million, the project went over budget.

Funding for the construction has come from a number of sources, including $25.5 million from the AMS and a pledged $4.5 million from the SGPS.

Vice-Principal (Operations and Finance) Andrew Simpson said he hasn’t yet considered increasing students’ financial contributions to the project.

The University has some financial cleanup to do, and one can’t help wondering how we got into this mess. If most of the overrun is due to rising construction costs, could the University not have tried to account for that in its initial budgeting?

The prospect of Queen’s cutting corners on the project to recoup costs is also worrisome: the outcome of this financial mismanagement could result in a Queen’s Centre missing the components that made it worth building in the first place.

Although the University’s signing a fixed-cost contract with PCL Construction Management, there’s little doubt that the cost overrun will continue to mount.

It’s also unclear how Queen’s will escape this financial dilemma: the project was budgeted to be $60 million in debt and surpassing that can’t be a good thing.

Simpson said they’re lobbying the government for more money but he isn’t optimistic about that project’s success. According to the Queen’s Centre website, $16.5 million in funding is coming from “government grants and other funding.” It’s ironic and discouraging the University’s dedicating its lobbying efforts to convincing the government the Queen’s Centre’s worthy of taxpayers’ money, while our departments continue to shrink—or disappear altogether—because the school can’t muster the funds to hire permanent professors.

Fluctuations in construction costs and overall changes in the economy are a given for such a long-term project, but the University alarmingly undershot their impact. Simpson, Associate Vice-Principal (Operations) Ann Browne and all parties involved in budgeting for the Queen’s Centre need to sit down, review what’s going where and determine how they plan to dig the University out of this hole—or start filling it.

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