Mr. Chairman, in Rankin Inlet last year, coincidentally the Department of National Defence was building a forward operating location, which included the paving of the Rankin Inlet airstrip and the tarmac area. As a result, the prime contractor, Gely Gautec Enterprises, had already mobilized an asphalt plant, rock crusher and paving machine, as well as their specialized work crew to Rankin Inlet for this project.
The hamlet of Rankin Inlet wanted to upgrade what is known as the Loop Road, the main arterial road in Rankin Inlet and they had a small amount of money in their budget to cover that work. The problem they encountered, though, was that they didn't have enough granular material locally available to do the work they wanted to do. The alternative for them was to bring in a blasting and crushing operation, which the government was prepared to do, but it was going to result in a cost of about $36 per cubic metre for granular material.
They went and spoke to Gely Gautec, who, coincidentally, had a crushing operation in place in Rankin Inlet already. They were near completion of the FOL project and had a surplus of well-graded granular material available, which was in excess of the requirements for the contract they were doing for National Defence. They made an offer to the project that they could provide the material to them at $16.50 a cubic metre, compared to the alternative option that the hamlet was facing of $36 per cubic meter. If they could find additional funding, they could actually go even further and pave the whole Loop Road in Rankin Inlet, because they also had an excess of asphalt material there for about $250,000 in total.
They then approached the department to see if there was funding assistance available. All this occurred at the end of July and, once final inspections were done on the project, the contractor wanted to move his equipment out of Rankin Inlet very quickly. This left a very short period of time to evaluate the situation, but we were able to determine that paving in Hay River and Yellowknife, for similar standards, results in about $200 per linear metre. This project offered Rankin Inlet paving for about $122 per metre, which is a significant savings.
We were also finalizing our standards and criteria for road paving projects. We had been doing a study in various communities, to determine the traffic volumes and what would be legitimate criteria for paving. That was set at 500 vehicles per day, and the road in Rankin Inlet was measuring 750 vehicles, which was well in excess of the standard we were contemplating for eligibility for paving. The community was prepared to make a financial contribution, in accordance with the new MCAP provisions that are being brought in, in the new fiscal year. They were able to negotiate a cash flow for the project that we thought we could manage. As well, the engineering consultants who were used by National Defence were available to provide their expertise to the project and the municipality was able to retain them to do that.
So, when we added it all up, it seemed like a very worthwhile and unique opportunity to provide paving to an arterial road in Rankin Inlet at a very low cost. It seemed this opportunity was not about to appear again for some time and we should seize it while it was there. So, as a result, the department was able to support the project and make the arrangement that it did.