Coleman blasts CBC on Humber Valley Paving

Says it was ‘gross misrepresentation’

James McLeod jmcleod@thetelegram.com
Published on May 27, 2014

The fight around a controversial roadwork contract linked to incoming premier Frank Coleman flared up again Monday, following a CBC report that stated he benefited personally from the government’s decision to let Humber Valley Paving out of a money-losing contract.

Coleman, speaking to The Telegram, batted back at the CBC and the Liberals who have led the charge on the Humber Valley Paving issue, saying the news coverage over the weekend was “gross misrepresentation” of what actually happened.

“I cannot imagine a bigger fabrication of the truth than what I saw this past weekend,” Coleman said.

Company released from contract

Earlier this year, around the same time Coleman was making his leap into politics, his son Gene Coleman, had a conversation with Transportation Minister Nick McGrath about letting Humber Valley Paving out of a money-losing contract to do roadwork on the Trans-Labrador Highway.

The company had completed most of the work, but the project was disrupted by forest fires in Labrador.

McGrath let the company out of the contract and bundled the remaining work as part of a larger tender for this summer.

In the process, McGrath waived a pair of bonds valued around $19 million associated with the paving contract.

In a weekend interview with the CBC, Coleman acknowledged that as a company shareholder, he was one of the ones indemnifying the bonds if they ever got called by government.

Coleman said he believes the government never would have been able to call those bonds — first because the company never defaulted on the contract, and also because the forest fires were an extenuating circumstance that it couldn’t be held to the original contract.

Moreover, he said the notion from the Liberals and the CBC he and his fellow shareholders were potentially off the hook from paying $20 million to the government is wrong because most of the contract was already  satisfactorily completed.

“The government wasn’t in a position to call the bond whatsoever,” he said. “Nothing could be further from the truth. This is a job that had 60 per cent or two thirds done. There was maybe six or seven million dollars left on the job. We could have finished the job. It was not in default.”

In the House of Assembly, Liberal Leader Dwight Ball kept pressing the matter, wanting to know when McGrath found out Coleman was one of the people indemnifying the bonds.

McGrath said he didn’t know that until this past weekend when he saw the CBC report.

“I have no comment when it comes to personalities or individuals. I deal with the contractor. In this case I had options. I took the option that I felt was in the best place for the people of Newfoundland and Labrador,” he said. “Looking at where this 60 kilometres is located and the window of opportunity I had to bundle that with other work, I either had to make a decision to delay the other work and not get that contract out ... or bundle this tender. That’s the decision we made and we stand by that decision.”

New Democrat Leader Lorraine Michael said she’s satisfied to wait for the auditor general to complete his investigation into the situation. With questions swirling, Premier Tom Marshall formally requested the auditor come in and do an independent review of it all.

But Ball said he’s going to keep pushing for more answers.

“We’ll keep asking questions, and hopefully the auditor general will take some of the questions we’ve been asking today,” he said.