Cost to replace Yellowknife's aging drinking-water pipeline balloons to $57M

The cost to replace Yellowknife's aging drinking water pipeline has ballooned in recent years, and the city doesn't have the cash on hand to pay for it.

The 54-year-old pipeline that pulls drinking water from the Yellowknife River is nearing the end of its life. A public memo provided to city councillors this week states that replacing the 8.4-kilometre pipeline is now expected to cost more than $57 million, up from an estimated $34.5 million in 2019.

The federal government had agreed to pay 75 per cent of the 2019 cost ($25.8 million) through its Disaster Mitigation and Adaptation Fund, with the city paying the rest ($8.6 million). The project was set to be completed in 2028.

But four years later, and after some planning and design work, the pipeline's price tag has grown by 65 per cent.

According to the city's agreement with the federal government, any cost overruns must be covered by the city. This means the city is now on the hook to pay $31.2 million for the new pipeline.

"This is beyond our capacity," city manager Sheila Bassi-Kellett said at a city council meeting on Monday. 

The city now plans to seek an extension on the project's timeline from the 2028 completion deadline to 2032, so it can "consider options and alternatives to address this increased project cost," said Bassi-Kellett.

The city says many Disaster Mitigation and Adaptation Fund applicants are seeing cost increases, and the federal Infrastructure department is granting extensions to projects across the country.

Yellowknife River a lower-risk source of drinking water

Since 1969, Yellowknife has drawn its potable water from the Yellowknife River. 

The decision to draw water from the river, rather than Yellowknife Bay, was made after the public expressed concerns over possible arsenic contamination in the bay from the nearby gold mines.

The federal government, Giant Mine and Con Mine contributed equally to the cost of building the pipeline from the river.

In 2017, infrastructure consulting company AECOM Canada Ltd. analyzed the costs and risks associated with pulling water from the river versus the bay.

Though the Yellowknife River option was nearly twice as expensive as the Yellowknife Bay option ($33 million over the course of the water line's life, compared to $16.2 million), the river came out on top for a number of reasons, including susceptibility to changes in water quality and reliability of the water supply.

Another engineering firm, Dillon Consulting Ltd., reviewed AECOM's study and backed its conclusion.

On Monday, city officials pressed the point that the chance of dangerous amounts of arsenic escaping from Giant Mine and entering the bay is very small. 

Still, asked Coun. Ben Hendriksen, "is that really something we want to be taking a risk on with our water source?"

"We need to prioritize the drinking water for half the territorial population, for the [Yellowknives Dene First Nation]," he said.

"The city is a tourism hub for this territory. If people are looking at tourism destinations, are they going to want to come to a place where, even if we know the water safe, where they question if the water is safe?"

Extension will give city more time to find funds, say officials

City officials say they've gone down many paths in search of money.

They've gone to the N.W.T. government. There were efforts to get the Giant Mine Remediation Project to pay for the pipeline. They even tried making a claim for compensation, which was ultimately unsuccessful.

"The city has made every effort to prevent the cost of replacement from falling onto Yellowknife residents," said Bassi-Kellett. 

The city says that extending the project's timeline by four years will allow more time to seek out funding from other orders of government.