Thank you, Mr. Chairman. I’d also like to thank the Members for their comments. I certainly can appreciate a certain level of frustration on this project. I don’t believe I have to remind anybody why the bridge project was embarked on. This has been on the minds of the residents of this area for years, from the time the Yellowknife road was constructed to connect to the rest of Canada, there has always been a bottleneck, there has always been a very fragile piece of infrastructure that had to be constructed
every year, and we also had to rely on ferry service that had a lot of interruptions and we still see that to this day. Through the concept of a public-private partnership we at last had the means to move forward on construction of a very important piece of public infrastructure that would allow us to construct this transportation infrastructure. It would also allow us to not deplete our capital resources, which we felt was important.
I still believe that it’s an important part of what we do; it’s an important piece of infrastructure. At the time, a year and a half ago when the opportunity was made available for me to assume the Department of Transportation I talked to the Premier because I felt that I could lend something to this department and to this project. I continue to believe in the project, and I certainly continue to believe in our staff at DOT.
For the time that I’ve been involved with the government as a Regular Member and as a Cabinet Minister, we’ve all talked about we need to think outside of the box, we have to be creative. Certainly that’s the direction I’ve taken as a result from what I hear in this government and what I hear from Regular Members. We’ve done a lot of things on that front. The Tuk-Inuvik road is a good example. It’s a partnership with those two communities, and it’s allowed us to provide a lot of work and move forward on that front where it’s attracted the attention of the federal government. We also have done the same thing with the City of Yellowknife; we created a partnership, something that historically hadn’t been done in terms of working together with communities. And we continue to do that. We’re doing it now with the project description report on the Mackenzie Valley Highway. We’re also signing agreements with the Gwich’in and the Sahtu and now the Deh Cho also want to have meetings.
So it’s an interesting way to do business. It’s something that we need to look at and the reality is if we don’t put on our creative hats, a lot of things wouldn’t happen. Certainly I think if the direction is that we change the way we do business and wait for the feds to do it, that’s something we’ll take as direction and move forward on that front. But recognizing that this project right from the get-go was a megaproject, any kind of slippage, any type of delays were going to be very expensive. I think we all recognize now there were challenges with the design that didn’t pass all the inspections that were required, and there were also challenges with the contractor and things had to be changed, decisions had to be made, and they were very difficult ones.
Earlier on we had anticipated, I think, MLA Hawkins indicated that we should have had federal support. Well, we did seek federal support in terms of dollars and investment. They were not in a position to
make that contribution as they didn’t have their P3 office set up and they just set the program up recently.
The bridge design was reviewed by advisors that we hired independently, that gave us the confidence to go ahead. There is, of course, as we know now, a lot of difficulty getting the conceptual design to pass a lot of the tests, but there is also rationale that we were challenged again because one of the designers left the project and we had to bring in new people onto the design team. The question was raised will we be going after the original designer for recovery? I imagine that’s something we’re going to visit. It’s under consideration. When a project goes forward without the original designer not being available, that certainly causes challenges and so we’re exploring that and we’re looking at other ways to see what we can recover. Having said that, we expect any litigation that is embarked on won’t be pretty and that’s certainly something that has to be considered as the project is stabilized and we move forward.
The regulations for the toll on the toll rate is again another area that we’re working on. It’s not done yet, but this is something we need to have in place before the summer of 2011.
The issues raised by MLA Ramsay are certainly not new ones. He’s raised them before. He’s been very vocal about the project. He’s stated on some occasions that he supports the project but has concerns. I’m still trying to find what areas he supports, and, of course, the public tender issue is something that he’s raised and we’ve responded by indicating that we did have initial discussions with ATCON Construction and weren’t able to conclude our negotiations or our discussions with them. Because of time and because of costs we felt the best way to go and we had people that concurred with us that this is what we needed to do. Going to a public tender would have meant another year delay. That would have cost at least the price of the interest and what it would mean to payments on interest and principal and that would have been, we calculate, at least $8 million plus and that’s not something we wanted to come forward for another contribution.
We agree that an audit needs to be done on the bridge. We have committed that we will be doing a review internally and also at the conclusion of the project have an independent company. I also believe the Premier had made those commitments prior to now and a lot of things have to be looked at. We have to look at the internal costs of what it costs us as a department, as a government and things that were not charged back to the project itself. We would expect that’s over $1 million for some of the staff that we have that put their time towards it, some of the vehicle costs, the travel costs, the hotel rooms, things of that nature have to
be calculated and packaged up so we can provide it. We have to take a detailed look at the construction costs to date. We have been reviewing it as we went along. We have to do a wrap-up and see what has transpired there.
I’m not sure when the Member states that I don’t believe the government or the department has an accurate measurement of how far the project has moved along and why he would challenge that. I’m not sure what his expertise is or who he is using to provide that information, but we feel it’s 50 percent completed, $90 million of the $180 million budget has been spent. I guess we need clarity as to what the Member means when he says what is also hanging out in the background. I thought we were pretty clear when we indicated that the contract for Ruskin was at $68 million. We signed for $72 because it included a $4 million carry-over. If that wasn’t clear to the Member I certainly apologize for that, but that was the intent and I believe that was brought forward to the committee.
There was also a question raised as to what day did the Bridge Corporation actually sign a contract with Ruskin Construction and that day was the 4th of March, that’s the day that the contract was actually signed. What caused the lenders to call or request the government to assume the loan? I think it’s pretty clear that they were feeling that there was a design default on the milestone that they set. We don’t agree, but there is no mechanism for us to appeal it or dispute it. So it’s brought us to this point. Also to look at cancelling the contract with Ruskin right now we feel would have huge financial implications and I’m still not happy when a Member raises a concern and points to a company that could do it cheaper, a company that feels they were left out and now is operating in hindsight and giving us a really lowball price. So it’s concerning, but I mean I have to appreciate the Member’s point of view.
Like other Members, I was happy to hear the comments from Mr. Abernethy. He’s indicated that is one of the first times that we’re going to be voting on this. I think the House has had a couple of occasions to vote on it, maybe not these Members but the 14th Assembly the Deh Cho Bridge Act was
voted on and more recently we had the $15 million supp that came forward. He’s also indicated that there’s a lot of lessons that need to be learned and we need to take a look at the concept of P3, what worked, what didn’t work and what do we do to prevent things of this nature from happening. I think there are a lot of things that we can look at for improvement. There’s also, of course, concern that he’s raised with myself because he felt I was confident on this project. Mr. Chair, I have to point to the fact that it’s difficult to deal with the number of challenges that have come forward, but at the same time if I was going to lose my confidence in the project, then I guess I wouldn’t or shouldn’t be
in this position. It’s still a project that can move forward, it can be stabilized. We’ve made a lot of changes.
Aside from the $15 million cost overrun, it has not cost any more than what we had anticipated. The $15 million is going to be recovered. We have to make sure people understand that and I certainly agree. Assuming the debt is something that has always been part of this project as we guaranteed it as a government. Of course, this is the worst-case scenario and we have to make sure and make it clear to the public as to what impact this would have to our borrowing limit and we also have to qualify and what and why we hired the team we have in terms of providing that information on their qualifications and what has given us the confidence as we move forward.
There is a timeline that’s put in place of 2011. That was not a number that was picked out of the air. That’s something that was discussed and calculated and the construction company felt was something they could achieve. So there is a schedule.
I also want to make a couple comments on Mr. Beaulieu’s statements regarding not knowing about the $165 million. I thought it was fairly clear, but it’s unfortunate that he misunderstood and I would point out to him that he should feel free to come and request additional information from us or a briefing if that is warranted. There is a return on the investment. I’m not sure why he would feel that there is no return. Up to now it’s only been for the Deh Cho Bridge Corporation and for us it would be that piece of infrastructure that we would assume in 35 years. There is a long-term commitment for 35 years on this project and there always has been.
I also wanted to point out that I certainly agree with some of the comments made by Mrs. Groenewegen about the $185 million capital investment. This is probably one of the few projects we have that has a self-liquidating component to it as three-quarters of this is either money that we’re already spending or money that we’ll be generating. It has some very positive parts to it. It’s unfortunate that we’ve had so many challenges.
I also want to make it clear that I’m concerned that a number of Members have raised potential structural problems with this project. I have no indication of that. We’ve gone back and talked to the people involved with the project. We’ve talked to the contractor. I’m not sure where that’s coming from. We know there are some people outside of this forum who may be raising this. It would be in order I think for us to be informed of that. If there is a concern for public safety or public security, then we should know that. Right now we have no evidence of that and we’ve talked to a lot of people in light of being informed that there were concerns.
So if anybody has any information, I certainly want to hear that.
There also is and still are many positive aspects of this project. Mrs. Groenewegen pointed to inflation and global warming. I would add to that convenience and environmental concerns and safety. All these things are still positive parts of this project.
Mr. Bromley raised a lot of issues also and made some interesting comments about this project having a checkered political and technical past. He’s also raised the concern about some of the issues on the technical side not being fully resolved. I would appreciate if we could get more clarity on what he’s pointing to. We feel we have a new design. We have the checks and balances. We have quality control in place that would prevent any concerns from coming forward.
He’s also made some comments or given his opinion about our fiscal framework and projections that are used. I guess our projection is just what it is: a projection based on our best information and best analysis with our best people.
The comments made by Wendy Bisaro regarding the project being poorly managed is something that I guess we’ll find out as we move forward. Fingers continue to be pointed either to the Bridge Corporation, ourselves, the contractor, the designer. I guess there are a lot of people involved and I’m sure everybody shares a little bit of what has happened.
There was a project management board set up initially and then last year we decided that it had really no value. They didn’t have a lot of authority or power to control. We were in a position where we had to step in and enhance our involvement. It was felt this was the best move.
We are looking at doing more assessments on truck traffic and more recently, as has been brought forward as an issue.
We are also tracking our revenues and expenditures separately. That’s a requirement of the Deh Cho Bridge Act.
As to the involvement of the Deh Cho Bridge Corporation in the community of Fort Providence, that’s something that’s ongoing. We’d like to resolve that as soon as possible. We’ve had a number of meetings already. We plan to meet with them again, at least some of the senior people, this week sometime and hopefully in the next couple of weeks we’ll have that resolved.
There has been mention by a number of people that there needs to be a complete analysis of the project. We need to set protocols in place. We certainly agree. We don’t dispute that.
Again, Mr. Yakeleya raised how this project has created headache and heartache. I certainly can
support that. The concept sounds very simple: you design a project, you provide the funding, you hire the contractors, you go forward. I think all those ingredients were part of this project. There have been challenges that have factored in. But I also agree with the Member when he states that there are other projects that have to be considered. We need to be able to at some point decide or become creative enough that we can deal with the Great Bear bridge crossing, the Peel River that the MLA for Mackenzie Delta keeps raising, and Liard, and all those crossings need to be addressed at some point. I’m not sure if that’s something we want to wait for the federal government to do or if we’re going to try to move forward on those fronts. Right now we need to focus on stabilizing this project.
Mr. Menicoche raised the issue of better communication. We agree. We have already started moving on that whole area that needs to be addressed. We have developed a website that we are in the testing stages of. We are currently using it internally and at some point we would like to have that opened up for the public so they can see what’s happening and get the reports. There is some information on the GNWT website, but we’d like to see a bridge website also. We also want to start looking at providing information in print and continue with providing reports to the MLAs so they are in tune as this project unfolds.
All these things need to be done. We need to deal with the current issues in front of us first, of course. And we have to also look at how to respond to other communities that are asking us to do similar projects.
I guess MLA Abernethy summed it up the best. There is virtually not a lot of changes to the project except for the fact that there is a cost factor because of the delay of $15 million. Now we have to assume the debt. We’ve always guaranteed the debt, but now it comes on our books and of course there are concerns for the implications to the debt wall.
There were many things said today and many things that we agree with. Some things we need to get more clarity on. There is a learning curve, as Mr. Krutko said, and it has been a huge one. We need to of course always have the due diligence as we deal with companies and design. So I appreciate all the comments that were made and look forward to further questions on more specific detail.