The B.C. Utilities Commission said Nov. 1 that pushing the pause button on BC Hydro’s $9 billion Site C dam would be more expensive than stopping the project.
That, according to the results of a three-month review ordered by the NDP.
Mothballing B.C.’s biggest construction project would cost more than $3.6 billion, double the cost of cancelling it. If the NDP continues with what the BC Liberals began, the final bill will be more than $10 billion and it won’t be ready by the promised 2024 completion.
Premier John Horgan vowed to decide the dam’s fate before the end of the year.
Also Nov. 1, the NDP announced two transportation reviews.
The minister responsible for the Insurance Corporation of B.C. said an outsourced review of operations will explore aspects of fraud that the Crown corporation had previously downplayed.
ICBC often blamed fraudulent crash claims for a spike in costs. An Ernst and Young report commissioned by the former BC Liberal government said the beleagured basic auto insurance and driver licensing monopoly needed to “broaden competitive procurement activities.”
“You should read the word ‘fraud’ in these terms of reference very broadly,” Attorney General David Eby told theBreaker, after hiring PwC to conduct a review over the next six months. “ICBC has very certainly been focused on customer fraud in its public-facing communications. I want to make sure that there are no issues internally or with contractors that employees that employees might be aware of and feel that they can bring it forward.”
Eby said he wants every employee at ICBC that has an idea to save money or a concern about how business is conducted to “bring it forward and that their job will be safe.”
ICBC lost $500 million last year. Because of urgency, Eby said it was his call “to proceed with speed to get this review underway,” instead of issuing an open tender call to all firms across North America. Deloitte, EY, KPMG and MNP were the other firms contacted.
PwC is also ICBC’s financial auditor, but Eby said PwC’s audit department is separate from its business review department. “There would be zero overlap,” he said.
He conceded that it is not a fixed-price contract and the cost will depend on how much work there is to do.
Eby said the government has already decided there will not be a move to no-fault insurance, but other efficiencies are sought.
“Legal costs are 25 cents of every premium dollar that’s collected, they’re a huge cost driver,” he said. “The previous government was afraid to have have difficult confersations with auto body repair groups, with medical experts, with the legal profession. We are not afraid to have those difficult conversations. Those costs must come down and we will find a way.”
In their final months, the BC Liberals considered selling ICBC’s North Vancouver headquarters and even the ICBC.com website address. Eby said information provided to him when he became Attorney General said the Industrial and Commercial Bank of China, the world’s largest bank by assets, was considered a potential buyer for the web name.
“There was a liquidation sale going on without addressing the underlying problem that business operations were not breaking even,” Eby said. “We want to make sure that we’re not taking the approach of the previous adminstration, which is what can we sell to buy a little bit of time.”
Untangling the Massey mess
Also Nov. 1, the NDP named Stanley Cowdell and his Westmar Project Advisors consultancy as the technical reviewer of the Massey Tunnel Replacement Project.
Transportation Minister Claire Trevena cancelled bidding for a 10-lane, $3.5 billion Richmond to Delta bridge on Sept. 6. It took nearly two months to announce the reviewer and terms of reference.
Cowdell’s firm will be paid between $350,000 and $1 million over six months.
Spokesman Ryan Jabs said the ministry considered “over two dozen people in the industry” who had not previously been involved in the Massey Tunnel Replacement Project. Ten people were directly contacted.
“The review may also include additional technical work done by other specialists in the areas of traffic engineering, geotechnical, seismology, bridge and tunnel design and construction, which may increase the costs (to a maximum of $1 million, including Mr. Cowdell’s contract),” Jabs said by email.
Westmar was the ministry’s representative on the SNC-Lavalin-built Bill Bennett Bridge, a floating bridge project built as a private-public partnership. The vice-president of the government’s PartnershipsBC agency from 2002 to 2008 was Grant Main, the deputy transportation minister who survived the transition from the BC Liberals to the NDP. In 2009, then-premier Gordon Campbell gave Westmar the gold medal innovation award.
Trevena was asked in Question Period why she hadn’t announced Cowdell a day earlier, during her ministry’s budget estimates hearing. She said the terms of reference weren’t finalized. Trevena said the 10-lane bridge plan was rushed under the BC Liberals, because it was a “glory project, for the previous premier.”
“We acknowledge there’s a traffic issue along the corridor, and something needs to be done,” she said. “But the scope of the 10-lane bridge was too big. They needed to work with local government around the whole region, including Metro Vancouver. That’s what we’re doing.”