Cost Estimate
June 2010
With the selection of the McLoughlin Option and pending the submission of an amendment to the Core Area Liquid Waste Management Plan, a revised cost estimate is now available for the Core Area's new wastewater system.
- The cost of the system is estimated $782 million.
- Annual resource recovery revenues are estimated at $3.1 million by 2030.
- Annual operating costs for the system are estimated at $14.5 million per year, with a per household cost of $210-$500 per year, depending on the municipality and structure of cost sharing agreements.
With these initial estimates, the CRD will now move forward with procurement options and cost sharing agreements.
Fall 2009
Cost Estimates for Option 1A & 1B
Cost estimates for Options 1A are significantly lower than previously thought. Breakdowns are as follows.
| Option 1A | $965 million |
| Option 1B | $875 million |
For more information on Options 1A, please see the siting page.
Summer 2009
Cost Estimates for the Three Wastewater Treatment Strategies
The chart below details the cost projections (escalated to the mid-point of construction) for the three distributed wastewater treatment plan scenarios. Read more on the details of each option on the Siting page.
Capital Costs
Operating Costs, Revenue and Greenhouse Gas Costs
As the number of wastewater treatment plants increase, the overall capital costs increase significantly. This is primarily due to the loss of economies of scale; larger plants are less expensive to build on a unit cost basis compared to smaller plants. The potential annual revenue from resource recovery increases with the number of plants, although the relative increase significantly slows with additional facilities. The data show that operations and maintenance costs are significantly larger than the potential revenues. Options 2 and 3 benefit from additional greenhouse gas credits.
2009 Capital Cost Estimate Breakdown
Capital costs for wastewater treatment are calculated on:
- Base construction costs
- Design and construction contingencies
- Indirect costs (engineering, administration, miscellaneous and interim financing)
Once the CRD has established a direction, it is important that the capital costs, particularly in the first stage, be inflated to reflect the actual period of construction. Costs for wastewater treatment are shown in 2008 dollars.
Cost ($ Million) |
|||
|---|---|---|---|
Facility |
Option1 |
Option 2 |
Option 3 |
Wastewater Treatment Macaulay/McLoughlin Point WWTP |
454 |
370 |
263 |
Wastewater Conveyance Modifications |
68 |
87 |
54 |
Biosolids Drying Hartland Biosolids Drying Facility |
53 |
53 |
53 |
Organics Royal Roads Organics Facility |
67 |
||
| Total Capital Costs | 1039 |
1444 |
1771 |
| Escalation Cost (see Note) | 131 |
182 |
223 |
| Total Estimated Capital Costs | 1170 |
1626 |
1994 |
Note: capital costs are escalated from 2008 dollars to the expected mid point of construction using an inflation allowance of 2.0% per year
2008 Cost Estimates for Municipalities (based on 1.2 billion)
In 2008, the CRD calculated illustrative cost scenarios for residents of each municipality in the core area, to provide a projection of potential costs of wastewater treatment. The total capital cost of 1.2 billlion was used. An update of this estimate is expected in 2009. As with any projections, the costs were based on current information, and are subject to a number of assumptions, including:
- Capital and operating cost estimates from consulting engineers' current multi-treatment plant model
- No development cost charge funding
- No current cost sharing agreement
- Allocation of costs between municipalities based on the most recent engineering projections
- Borrowing at 6% over 25 years at an inflation rate of 2.5%
- Projections for population and assessment of growth
Cost Sharing
Cost sharing formulas have not been implemented in the numbers below. Cost sharing negotiations are the responsibility of individual municipalities and would occur before final costs can be known.
The CRD has retained an independent fairness and methodology advisor, Peter Adams, to assist in determining cost sharing options available to municipalities.
2008 Costs to Average Residential Household Per Year
Municipality |
Dry Weather Flow |
Total Flow |
|---|---|---|
| Colwood | $220.71 | $197.81 |
| Esquimalt | $368.76 | $408.45 |
| Langford | $188.70 | $157.49 |
| Oak Bay | $541.11 | $712.98 |
| Saanich | $548.35 | $471.12 |
| Victoria | $412.59 | $464.85 |
| View Royal | $499.33 | $430.88 |
*This estimate is based on 2007 construction costs on a total capital cost of 1.2 billion
© Top image courtesy of Evan Leeson.