Last week, the Vancouver Fraser Port Authority kicked off procurement for the new Roberts Bank Terminal 2 project by issuing a request for qualification (RFQ). Bidders now have until September 25, 2025 to submit their qualifications with the hopes of eventually being selected to deliver this "nation-building project" in the Lower Mainland of BC.
The contract will include the delivery of an approximately 100-hectare marine landmass (~247 acres), 35-hectare widened causeway, 1,300-meter wharf structure and berth pocket, and expanded tug basin. And when complete by the mid-2030s, the new terminal is expected to create more than 17,000 well-paying long-term jobs, unlock $100 billion in new trade capacity, and contribute somewhere around $3 billion in annual GDP.
Here's a rendering of the new marine landmass:
The Port of Vancouver is the largest port in Canada by tonnage and TEUs (twenty-foot equivalent units). It's also one of the largest in North America. This expansion is expected to increase its capacity by up to 50%, which could have it leap ahead of several major US ports by the time it's complete in the mid-30s. That could place it among the top 4 container ports in North America.
It would be hard to overstate the importance of this project for Canada. The economic center of gravity for the world is steadily moving toward East Asia. In the 1980s, if you were to map and drop a pin at this economic center — according to GDP — it would have landed in the North Atlantic (between the US and Europe). By 2030, this economic center is projected to be near the border of India and China.
Already, China is Canada's second largest trading partner (after the US). And over 60% of the container trade flowing through Vancouver is transpacific. More specifically, it is trade with China, Japan, South Korea, Vietnam, and India. If we don't expand our port capacity and if we allow our container supply chain to become bottlenecked, well then these containers will simply shift south to the US West Coast. It's that simple.
Though this project was approved by the federal and provincial governments in 2023, it has faced stiff opposition from local community groups and environmentalists. This is partly why it took approximately 10 years. The Federal Environmental Assessment process began in 2013. And it wasn't until April 2023 that the feds granted approval with a list of 370 legally binding environmental conditions.
What this means is that by the time this project is (hopefully) complete in the mid-30s, it will have taken at least two decades! And perhaps even longer knowing how construction works. This is far too long, which is obviously why we are working to make changes to how we, as a country, green light important nation-building projects. There's no question that this is one of them, and so today I think it's important to celebrate this milestone.
It's time to build, Canada. And as fast as possible.
The typical way to build buildings is through a design-bid-build approach. The way this works is that you first design stuff and create drawings. You then ask people to price the stuff that you have drawn. And then you proceed to build what is on the drawings and what has been priced.
There are a number of possible risks with this approach. For one, the design/drawing phase is sometimes/often done in isolation without a lot of feedback from the contractor and/or subcontractors. So you might be designing and drawing things that aren't all that feasible or constructible. Pre-construction involvement helps address this.
Another risk is that you're buying what is on the drawings. So if the drawings suck or aren't properly coordinated, then you are likely opening yourself up to a barrage of change orders and lots of additional costs.
In theory, it all sounds fine. Here are my drawings and specifications. Give me a price. And then let's build. But as many or most of you will know, it's generally never that simple or easy. Though it will, of course, depend on the type and complexity of the project.
Another consideration is the kind of contract you enter with your constructor. Is it a cost-plus contract, where the constructor simply charges a percentage on top of whatever the costs end up being, or is it some kind of lump sum or guaranteed maximum price (GMP) contract?
While I was in architecture school I decided to take a class on construction delivery methods. The instructor was, in my mind, your quintessential construction person. He was built like a brick shithouse and he never minced words. He also had a voice that sounded like a subwoofer.
I wouldn't say I'm an expert, but I do remember him hammering home two points. One, GMP actually stands for guaranteed minimum price. This is forever imprinted in my mind. You're never going to pay less and you're almost certainly not going to pay the "maximum" number. You will end up getting change ordered and paying more.
Two, lump sum and at-risk contracts create a very different relationship between owner/developer and constructor. In his words, it is adversarial.
Because if I'm a constructor and I've promised a specific number, I'm likely going to do a few things. I am going to inflate the numbers to make sure my profit margin is protected throughout the project. And if my profit margin gets squeezed, which it likely will, I'm going to look for other ways to make money.
Personally, I side towards cost-plus and construction management arrangements. I don't want an adversarial relationship. I want a partnership where there's as much alignment as possible around a common set of project goals. Let's ride or die together.
Similarly, when it comes to the actual procurement and delivery methods, I find that we are often using more integrated approaches as opposed to cut and dry design-bid-build approaches. You want the competitive pricing that comes with bidding, but you also want collaboration. It's about striking that right balance.
The construction process is a messy one. These are just some of my thoughts this morning. If any of you have any insights, I would, of course, welcome them in the comment section below.
Last week, the Vancouver Fraser Port Authority kicked off procurement for the new Roberts Bank Terminal 2 project by issuing a request for qualification (RFQ). Bidders now have until September 25, 2025 to submit their qualifications with the hopes of eventually being selected to deliver this "nation-building project" in the Lower Mainland of BC.
The contract will include the delivery of an approximately 100-hectare marine landmass (~247 acres), 35-hectare widened causeway, 1,300-meter wharf structure and berth pocket, and expanded tug basin. And when complete by the mid-2030s, the new terminal is expected to create more than 17,000 well-paying long-term jobs, unlock $100 billion in new trade capacity, and contribute somewhere around $3 billion in annual GDP.
Here's a rendering of the new marine landmass:
The Port of Vancouver is the largest port in Canada by tonnage and TEUs (twenty-foot equivalent units). It's also one of the largest in North America. This expansion is expected to increase its capacity by up to 50%, which could have it leap ahead of several major US ports by the time it's complete in the mid-30s. That could place it among the top 4 container ports in North America.
It would be hard to overstate the importance of this project for Canada. The economic center of gravity for the world is steadily moving toward East Asia. In the 1980s, if you were to map and drop a pin at this economic center — according to GDP — it would have landed in the North Atlantic (between the US and Europe). By 2030, this economic center is projected to be near the border of India and China.
Already, China is Canada's second largest trading partner (after the US). And over 60% of the container trade flowing through Vancouver is transpacific. More specifically, it is trade with China, Japan, South Korea, Vietnam, and India. If we don't expand our port capacity and if we allow our container supply chain to become bottlenecked, well then these containers will simply shift south to the US West Coast. It's that simple.
Though this project was approved by the federal and provincial governments in 2023, it has faced stiff opposition from local community groups and environmentalists. This is partly why it took approximately 10 years. The Federal Environmental Assessment process began in 2013. And it wasn't until April 2023 that the feds granted approval with a list of 370 legally binding environmental conditions.
What this means is that by the time this project is (hopefully) complete in the mid-30s, it will have taken at least two decades! And perhaps even longer knowing how construction works. This is far too long, which is obviously why we are working to make changes to how we, as a country, green light important nation-building projects. There's no question that this is one of them, and so today I think it's important to celebrate this milestone.
It's time to build, Canada. And as fast as possible.
The typical way to build buildings is through a design-bid-build approach. The way this works is that you first design stuff and create drawings. You then ask people to price the stuff that you have drawn. And then you proceed to build what is on the drawings and what has been priced.
There are a number of possible risks with this approach. For one, the design/drawing phase is sometimes/often done in isolation without a lot of feedback from the contractor and/or subcontractors. So you might be designing and drawing things that aren't all that feasible or constructible. Pre-construction involvement helps address this.
Another risk is that you're buying what is on the drawings. So if the drawings suck or aren't properly coordinated, then you are likely opening yourself up to a barrage of change orders and lots of additional costs.
In theory, it all sounds fine. Here are my drawings and specifications. Give me a price. And then let's build. But as many or most of you will know, it's generally never that simple or easy. Though it will, of course, depend on the type and complexity of the project.
Another consideration is the kind of contract you enter with your constructor. Is it a cost-plus contract, where the constructor simply charges a percentage on top of whatever the costs end up being, or is it some kind of lump sum or guaranteed maximum price (GMP) contract?
While I was in architecture school I decided to take a class on construction delivery methods. The instructor was, in my mind, your quintessential construction person. He was built like a brick shithouse and he never minced words. He also had a voice that sounded like a subwoofer.
I wouldn't say I'm an expert, but I do remember him hammering home two points. One, GMP actually stands for guaranteed minimum price. This is forever imprinted in my mind. You're never going to pay less and you're almost certainly not going to pay the "maximum" number. You will end up getting change ordered and paying more.
Two, lump sum and at-risk contracts create a very different relationship between owner/developer and constructor. In his words, it is adversarial.
Because if I'm a constructor and I've promised a specific number, I'm likely going to do a few things. I am going to inflate the numbers to make sure my profit margin is protected throughout the project. And if my profit margin gets squeezed, which it likely will, I'm going to look for other ways to make money.
Personally, I side towards cost-plus and construction management arrangements. I don't want an adversarial relationship. I want a partnership where there's as much alignment as possible around a common set of project goals. Let's ride or die together.
Similarly, when it comes to the actual procurement and delivery methods, I find that we are often using more integrated approaches as opposed to cut and dry design-bid-build approaches. You want the competitive pricing that comes with bidding, but you also want collaboration. It's about striking that right balance.
The construction process is a messy one. These are just some of my thoughts this morning. If any of you have any insights, I would, of course, welcome them in the comment section below.
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