TOWNSHIP OF ESQUIMALT STAFF REPORT
MEETING DATE: July 06, 2026 Report No. EPW-26-007
TO: Council
FROM: Charles Davie, Manager of Engineering
SUBJECT: Esquimalt Road Phase 2 - Construction Contract Award
RECOMMENDATION:
Recommendation
That Council award a construction contract (ENG #26-03), including optional and provisional work and future change orders within the approved budget, to Hazelwood Construction Services Inc. in the amount of $3,616,759.80, for Esquimalt Road Phase 2 - Active Transportation Improvements and Underground Utility Renewals project, as described in Staff Report EPW-26-007.
Body
EXECUTIVE SUMMARY:
The purpose of this report is to award a construction contract for Phase 2 of the Esquimalt Road Active Transportation and Underground Improvements project, which is between Lampson Street and Fraser Street, and between Admirals Road and Canteen Road.
BACKGROUND:
The Esquimalt Road Active Transportation and Underground Improvements project is a project identified in the Township's Active Transportation Network Plan (ATNP) to add protected cycling facilities on Esquimalt Road from Canteen Road to Dominion Road, while coordinating roadway and underground utility improvements.
Phase 1 of this project was completed between Lampson Street and Dominion Road. Phase 2 of the project continues implementation of the ATNP and includes improvements between Lampson Street and Fraser Street, and between Admirals Road and Canteen Road.
Phase 2 also includes water infrastructure improvements along Esquimalt Road between Lampson Street and Admirals Road, in partnership with the City of Victoria. The City of Victoria owns and operates the water distribution system within the Township of Esquimalt and will fund the watermain abandonment, service relocations, and associated water infrastructure improvements included within the construction contract. The original scope of the project identified seismic upgrades to one of the watermains along this corridor; however, through the detailed design process, the scope was refined to include only the abandonment of an existing watermain and the reconnection of 14 services to another existing watermain. While most of this work is concentrated between Lampson Street and Fraser Street, the full scope included in this project extends from Lampson Street to Admirals Road.
On May 25, 2026, a tender was posted for the Esquimalt Road Active Transportation and Underground Improvements - Phase 2 project. This followed engagement on Esquimalt Road Phase 2 between February and April 2026 and subsequent direction from Council to proceed with detailed design and construction tendering at the May 4, 2026 Council meeting in response to Staff Report EPW-26-002. Public engagement included online surveys, community outreach, and an open house.
The key elements included in the tender are summarized and shown in the detailed design drawings in Attachments 1 and 2 for reference.
Project Description - Esquimalt Road Active Transportation and Underground Improvements - Phase 2
• Curb, gutter, sidewalk and accessibility improvements at various intersections
• Protected uni-directional bike lanes within the project corridor
• Corridor wide roadway rehabilitation and paving works
• Pedestrian and multi-use Rectangular Rapid Flashing Beacon (RRFB) crossings
• Traffic signal at Nelson and Esquimalt
• Traffic signal upgrades and modifications to existing intersections
• Street lighting upgrades
• Sanitary and storm sewer rehabilitation works
• Watermain abandonment and service relocations between Lampson Street and Admirals Road in coordination with the City of Victoria
• Pavement marking and signage improvements
Tender Summary
The tender closed on June 18, 2026. The following is a summary of the four bids received:
Bidder Total Bid Amount (excludes GST)
Hazelwood Construction Services Inc. $3,616,759.80
Alterra Construction Ltd. $3,712,385.90
Stone Pacific Contracting Ltd. $3,799,848.94
Sparker Construction Ltd. $5,001,189.82
Staff and the Township’s consultant reviewed the bids and determined all four bids meet the requirements of the tender. Hazelwood Construction Services Inc. (Hazelwood) is the lowest bidder and will be the only bid listed for the remainder of this report.
Below is a breakdown of the budget compared to the total costs using the lowest bid. The Phase 2 project All costs include consultant fees (design and construction administration), internal project costs and construction bid amounts as well as costs incurred to date. Contingency is not included and is expected to be used from the difference between budget and projected costs. The watermain costs will be paid by the Township as part of the project but these will be fully reimbursed by the City of Victoria with each progress payment.
Project Funding Source Budget Total Project
Costs
Phase 2 Capital Projects Reserve Fund $3,750,000.00 $3,487,696.45
Watermain City of Victoria - Cost Recovery N/A $483,708.09
Cost Split by Asset Type (excluding watermain):
ANALYSIS:
Staff recommend awarding a contract to the lowest bidder Hazelwood Construction Services Inc. for the Esquimalt Road Active Transportation and Underground Improvements - Phase 2 project.
The scope of work described in this report and shown in the attached design drawings reflects the project as identified in the ATNP and is based on feedback received during public engagement and detailed design.
The project has been coordinated with the City of Victoria to complete water infrastructure improvements concurrently with the active transportation and underground utility works. Delivering these improvements under a single construction contract minimizes future disruptions to residents and businesses, reduces overall construction costs, and avoids the need for subsequent excavation/patching of the Esquimalt Road corridor.
The lowest bidder is within the approved budget when excluding City of Victoria works. If Council awards the contract, the Township of Esquimalt would retain Hazelwood Construction Services Ltd. and perform cost recovery for all works falling under the City of Victoria’s scope ($483,708.09). This overall budget will allow for sufficient contingency to be used during construction, if required. If awarded, construction would start in Summer 2026 and continue into Fall 2026. The contract requires all paving scope, which has the largest impact on traffic, to be completed by September 30, 2026. The contract allows the remaining work to continue until December 15, 2026.
Environmental Impact:
Active transportation plays a significant role in mitigating climate change as the transportation sector accounts for 33% of the community greenhouse gas (GHG) emissions. Completing bike lanes, pedestrian improvements, and accessibility upgrades along Esquimalt Road addresses a priority project identified in the Township's ATNP.
OPTIONS:
1. That Council award a construction contract (ENG #26-03), optional and provisional work and future change orders within the approved budget, to Hazelwood Construction Services Inc. in the amount of $3,616,759.80, for Esquimalt Road Active Transportation and Underground Improvements - Phase 2, as described in Staff Report EPW-26-007.
2. That Council request additional information from staff.
3. That Council provides alternate directions for staff.
COUNCIL PRIORITY:
Engaged & Healthy Community - Implement Active Transportation Network Plan
FINANCIAL IMPACT:
The 2026-2030 Financial Plan includes an approved budget of $3,661,482 for the Esquimalt Road Phase 2 - Active Transportation Improvements and Underground Utility renewals project.
As of May 31, 2026, the available project budget for construction is $3,599,676.06, reflecting project expenditures to date. The low bid submitted by Hazelwood Construction Services Inc. is $3,616,759.80 excluding GST.
A portion of the construction contract value relates to City of Victoria water infrastructure improvements and associated project costs. Based on the current cost-sharing allocation, the City of Victoria's share of the construction contract is $483,708.09.
Description Amount
Available Project Budget as of May 31, 2026 $3,599,676.06
Township Share of Construction Contract $3,133,051.71
Remaining Project Budget $466,624.35
Outstanding Consultant Fees and Internal Project Costs $204,320.80
Remaining Contingency $262,303.55
Based on the above, the project can be delivered within the approved project budget while maintaining an acceptable contingency during construction.
The Township has also secured $500,000 in development contributions associated with developments along the corridor. These funds have not been included in the available budget figures above as they have not been received yet but are secured through rezoning covenants. Once received, these contributions will be applied directly to fund the project costs. This would reduce the amount to be funded from the Capital Projects Reserve Fund.
COMMUNICATIONS/ENGAGEMENT:
Communications during construction will be managed by staff and the contractor. Staff will mail a letter to all residents along the corridor in advance of construction to explain the project and impacts. The contractor will be required to notify residents during construction of traffic and pedestrian impacts. Staff will utilize social media and the Township’s website where necessary to communicate significant impacts.
TIMELINES & NEXT STEPS:
The next step in this project is issuance of a Notice of Award pending Council approval. Substantial completion for the construction phase is currently identified as December 15, 2026.
REPORT REVIEWED BY:
1. Joel Clary, Director of Engineering & Public Works, Reviewed
2. Ian Irvine, Director of Finance, Reviewed
3. Deb Hopkins, Director of Corporate Services, Reviewed
4. Dan Horan, Chief Administrative Officer, Concurrence
LIST OF ATTACHMENTS:
1. Esquimalt Road Phase 2 - Active Transportation Improvements and Underground Utility Renewals Drawings
2. City of Victoria Watermain Abandonment and Service Relocates Drawings