N.W.T. bridge $15M over budget

Building the Deh Cho Bridge over the Mackenzie River is now expected to cost $182 million, bringing it at least $15 million over budget, according to the Northwest Territories government.

The cost overruns are the result of the bridge having to be redesigned, which has led to a one-year delay and the need to produce new quotes for the final phase of construction, Transportation Minister Michael McLeod said Friday.

McLeod acknowledged that the bridge's new design failed to deliver the construction cost savings that were predicted last year.

The N.W.T. government is responsible for covering those extra costs for now, so MLAs are will be asked to vote on whether to let the government borrow $15 million this year to cover the cost overruns.

"Right now we expect the $15 million is going to cover all the claims," McLeod said Friday. "It's going to cover all the changes that we've had to make."

The news outraged some non-cabinet MLAs who said the government's support of the increasingly expensive bridge could cripple the territory's finances.

"If we were a family, we would be getting close to living in the street. Our credit cards are maxed out. We've poured our money into building a new garage when the house is falling down," Weledeh MLA Bob Bromley said in the legislature Friday morning.

"We are at that point where we could easily spiral into crippling debt."

Bromley said the additional costs of the bridge will hurt the N.W.T.'s credit rating and may result in other infrastructure priorities, such as upgrading Stanton Territorial Hospital, being pushed back.

'Boondoggle'

McLeod said he could not predict if there will be any more cost overruns in the future, but Kam Lake MLA David Ramsay said he fears the costs will keep rising.

"My guess is this project will cost close to $200 million by the time all is said and done," Ramsay said.

"This, Mr. Speaker, is a complete and utter disaster of a project…. The darkest days may yet to be upon us as we continue to look at this project and this complete and utter boondoggle that the Deh Cho Bridge project has become."

The bridge, currently half-completed, is a joint project between the territorial government and the Deh Cho Bridge Corp., which will operate the bridge at Fort Providence, N.W.T., once built.

It will span across the Mackenzie River at Fort Providence, N.W.T., and link Yellowknife and other North Slave communities to southern Canada year-round, replacing the current summer ferry service and winter ice road.

The bridge was originally estimated to cost $50 million six years ago. Taxpayers were told they would be on the hook for only $9 million, and tolls collected from the bridge would eventually cover the costs.

Prior to Friday, the project's costs had been pegged at approximately $165 million.

Costs could be recovered: Miltenberger

Finance Minister Michael Miltenberger said the Deh Cho Bridge's costs could still be recovered "through the tolls and all the other arrangements that have been signed as part of this deal."

"But going forward, because of this debt and other debt that we've agreed to accumulate as part of the current economic downturn, we are going to be going down in our borrowing limit," Miltenberger added.

"In 2011-12, our available borrowing capacity will shrink to about $85 million."

The government also announced Friday that it is in the process of replacing the Deh Cho Bridge Corp.'s project managers, Andrew Gamble and Jivkov Engineering, with Transportation Department staff and an unnamed company.

"We are now in charge of the project management, so the reporting will come directly to us," McLeod said.

Last month, the government said Atcon Construction of Miramichi, N.B., would no longer be the general contractor for the bridge project.

McLeod said talks with a new general contractor are in the final stages and will be finalized by the deadline of March 1.

Meeting that deadline will ensure that the project will still be completed by November 2011.

Ongoing legacy

Hay River South MLA Jane Groenewegen questioned the need for a bridge in the first place, saying there was nothing wrong with the existing ferry and ice road service across the Mackenzie River.

"Somebody wanted to leave this territory a legacy. And we have been left with a legacy, alright, and I don't think we even begin to see the end of it yet," Groenewegen said in the legislature.

"We've been sold a bill of goods so many times already on this project that, 'Don't worry, trust us, this is the limit of our involvement' just isn't believable anymore."

But with about $83 million already spent on construction, both Groenewegen and McLeod acknowledged that killing the project would be costly.

"Some would just ask, 'Why not just mothball the project and pick it up again in the future, in better economic times?' The problem with that idea is that apparently the pillars would have to be removed, and that would cost more than it cost to put them there in the first place," she said.

"Terminating the lending agreement that we are backstopping would also cost about $50 million in interest and penalties. So that idea of stopping the bridge at this juncture is probably a non-starter," she added.

Since the government has guaranteed the Deh Cho Bridge Corp.'s loans, McLeod said pulling out of the project now could cost in excess of $100 million in total.