Former minister’s comments prompt discussion of best practices
If nothing else, statements made earlier this week by former provincial Minister of Natural Resources Shawn Skinner have launched a few conversations about best practices when it comes to contracting for construction megaprojects.
In interviews with both VOCM and The Telegram, Skinner raised questions about international contractors working on the multibillion-dollar hydroelectric development at Muskrat Falls, on the lower Churchill River.
Acknowledging he had a vested interest — working for Aecon, a company with a bid in for project work — Skinner said he still stands by his main point: that companies with local presence should be favoured over foreign companies.
“The element of risk is greater when going this route (of hiring outside companies) than if a Canadian firm were chosen. While the initial bid may be lower, the risk of cost overruns, delayed schedule, or safety violations is greater due to the lack of experience working in the Canadian environment by these foreign firms,” he stated in an email.
Reached by phone Thursday, he said he has received “a bunch of emails from various sources” since the recent media reports, each offering information about large construction projects in other parts of North America running over-budget, raising safety red flags or otherwise not being completed as expected.
He offered the example of complaints earlier this season from the Construction and Design Alliance of Ontario and the Consulting Engineers of Ontario around safety and local content for the Eglinton-Scarborough Crosstown LRT.
Also in Ontario, he noted, the $1.4-billion budget for the Herb Gray Parkway in Windsor has been reportedly set off the rails as a result of potentially defective girders being installed by a Spanish-based project contractor.
In British Columbia, a German-based company was contracted in 2004 to construct tunnels for a drinking water development for the Vancouver area. The company’s project bid of $100 million was almost half of the next-lowest bid on the work, Metro Vancouver has stated. The contracted company started but never completed the work and costs jumped.
“If Mr. Bennett feels that level of comfort (on Muskrat Falls contracts) given what I’ve talked about and what I’ve presented to you and what I’ve seen has happened and have been told has happened in other parts of the country, then fine,” Skinner said.
“They’re the ones that are going to be responsible at the end of the day — Nalcor and the government.”
Bruce Rogers at REL Enterprises, provincially-based industrial safety trainers, contacted The Telegram earlier in the week to say he feels the former minister’s comments amount to “fear-mongering.”
Rogers said he personally attempted to connect with each of the four bidders on the contract for the intake, powerhouse, spillway and transition dams at Muskrat Falls.
“I approached lots of companies and the one I got rebuffed by was a Canadian company,” he said, claiming that company was Skinner’s employer.
Skinner said he had not been contacted by Rogers, but that contact may have preceeded his time with the company.
“I got the complete opposite reaction when I approached the Italian companies. One in particular,” Rogers said, explaining he met with representatives for that company in Toronto, for a detailed presentation of what his company has to offer and at what cost.
Rogers said he agreed to confidentiality with the company, also acknowledging there is no guarantee he will be awarded a subcontract with any company in the Muskrat Falls bid process.
As for the Lower Churchill work and the ability for the Muskrat Falls project to be brought in on time and on budget, Nalcor Energy vice-president and project lead Gilbert Bennett has said due diligence is being performed, benefits assurances will be met and the Crown corporation will obtain “the best value for the people of the province.”
As reported in June, Nalcor has awarded a contract for third-party quality assurance services as an addition to its own work with procurement and project management contractors SNC-Lavalin, before individual supply and service contracts are awarded. The third-party contracts went in March to: GL Noble Denton Canada Ltd., Moody International Ltd., SGS Canada and Killick Group.
Smaller supply and service contracts on the megaproject also require quality plans, detailing how contractors will track their progress and complete their work on time.
The contract for the intake, powerhouse, spillway and transition dams at Muskrat Falls — in which Skinner’s own company has an interest — has yet to be awarded.