Dive Brief:
- Due to the weak Canadian dollar, the cost of the new Gordie Howe International Bridge connecting Windsor, Ontario, and Detroit has risen by $2 billion and could rise as much as $3.5 billion, with a current projected long-term cost of $4.8 billion, according to the Canadian Press.
- In a secret briefing note obtained by the Canadian Press, government officials told Prime Minister Justin Trudeau that the project would also need an extra $1.5 billion in a contingency fund to cover any interest rate increases should the Canadian dollar decline further against the American dollar.
- The Windsor-Detroit crossing is the busiest commercial trade crossing between Canada and the United States. When complete, the new two-mile bridge could be one of the five longest in North America and match the height of Detroit’s Renaissance Center.
Dive Insight:
The bridge is one of the most recent Canadian infrastructure projects set up as a public-private partnership, or P3, in which a private company or group collaborates with a public entity and assumes much, if not all, of the financing and construction risks, as well as long-term maintenance. Toronto’s light rail and Dallas' LBJ Expressway rehab projects are examples of recent, successful P3 strategies, and Edmonton, Alberta’s new $1.8 billion Valley Line LRT will also be a P3.
In the U.S., P3s have run into some opposition with critics arguing that public entities are taking advantage of exemptions and breaks normally given to public projects, yet using P3s to get around open bidding requirements.
What might be the most fascinating aspect of this project, though, is that the current crossing, the Ambassador Bridge, is the only major privately owned border crossing between the U.S. and Canada. The bridge handles an estimated 25% of trade between the two countries, and the owner, Manuel Moroun, has unsuccessfully sued to stop the construction of the new bridge, instead proposing his company build a second span to the existing bridge.
While his plan is widely thought to be unrealistic, if he is successful in obtaining a permit from the Coast Guard, the Detroit billionaire could be on his way to his goal of building his second bridge before the Gordie Howe International Bridge is complete.