Bob Mackin (Updated July 26)
The reorganization of SNC-Lavalin has thrown a curveball at two Metro Vancouver infrastructure projects.
On July 22, the troubled Montreal construction and engineering giant announced it would exit so-called lump-sum turnkey contracting and shift its oil, gas and mining and infrastructure construction divisions into separate businesses.
Premier John Horgan at SNC-Lavalin’s Canada Line maintenance facility in Richmond. (BC Gov)
Since then, the company has withdrawn bids for the $2.83 billion Broadway Subway and the $1.4 billion Pattullo Bridge replacement project. The former bid was on its own, the latter with Acciona under the “Fraser River Partners” umbrella.
SNC-Lavalin spokesman Nicolas Ryan confirmed the decision in an email to theBreaker.news on July 25. SNC-Lavalin most recently built and operates the 2009-opened Canada Line and the 2016-opened Evergreen Line extension to the Millennium Line. It had been shortlisted for a bridge planned to replace the Massey Tunnel, but the NDP government mothballed the project.
“SNC-Lavalin will fulfil the contractual obligations of its current lump-sum turnkey projects,” Ryan wrote.
The other public private partnerships that SNC-Lavalin withdrew from were the $2.6 billion Edmonton Valley Line West LRT and $1 billion Louis-Hippolyte-Fontaine Tunnel Rehabilitation. The four projects total represented a total $7.43 billion opportunity for the company.
Inframation News showed KPMG was the grantor financial advisor on the Pattullo bid and Aird and Berlis the grantor legal advisor on the Broadway bid.
Acciona and Ghella are partnered in a bid for the Broadway Subway against the Broadway Connect team led by Dragados and Aecon. Pattullo bidders remain Kiewit’s Fraser Community Connectors and the team of Flatiron, Dragados and Carlson.
In hindsight, the bid for the Broadway Subway appeared unstable.
Even with Ryan confirming SNC-Lavalin was out of running for the Pattullo Bridge, the B.C. Ministry of Transportation and Infrastructure insisted on July 25 that the company was still a candidate.
Aritst’s rendering of the new Pattullo Bridge (TransLink)
“One of the proponent teams is Fraser River Partners which is a joint venture of SNC-Lavalin and Acciona Infrastructure Canada Inc.,” read the statement sent from the ministry’s Jamie Weiss. “There is no change to the pre-qualified bidding teams to report on this project at this time. However, the request for proposals includes a process that allows for potential changes in Proponent team members. Procurement for these important infrastructure projects is confidential and still ongoing.
“We can’t comment on SNC Lavalin’s response to you,” Weiss said, referring theBreaker.news back to the prepared statement.
An industry source, who declined to be identified, said SNC-Lavalin has lost staff beyond cyclical variations. Some of the other bidders have picked up ex-SNC-Lavalin workers. The company also no longer wants to take risks on design/build/finance/operate contracts. The source also said that both Trevena and TransLink senior officials have been briefed that only one bidder remains for the Pattullo Bridge.
Did SNC-Lavalin foreshadow the withdrawal when the Broadway Subway shortlist was revealed in late June? The SNC-Lavalin team was called West 9th Partners, but it had no partners. Only four SNC-Lavalin entities: SNC-Lavalin Capital Inc., SNC-Lavalin Constructors Pacific Inc., SNC-Lavalin Inc. and SNC-Lavalin Group Inc.
SNC-Lavalin is one of the major contractors on the $10.7 billion Site C dam in northern B.C., working with Klohn Crippen Berger to design major civil components of the dam and generating station.
“We continue to maintain a strong business relationship with SNC-Lavalin,” said BC Hydro spokeswoman Tanya Fish. “Should their situation change, we do have contingencies in place to ensure project work and timelines are not impacted. We would seek to retain the expertise and experience of SNC-Lavalin engineers currently working on the project.”
BC Hydro refuses to release the names of the SNC-Lavalin executives and workers on the project, but a list obtained by theBreaker.news shows that they are attached to both the Vancouver and Montreal offices.
The cancellation of its bids doesn’t necessarily mean that SNC-Lavalin won’t have a role as a subcontractor or supplier to either project. But it is a major surprise after British Columbia became one of its most important markets.
In 2011, its then-chair, Gwyn Morgan, was a major backer of Christy Clark’s rise to power. Morgan chaired SNC-Lavalin from 2007 to 2013 and donated $285,600 under his own name to the BC Liberals from 2009 to 2018. SNC-Lavalin received billions of dollars of contracts after Clark won the BC Liberal leadership and became premier, such as the Evergreen Line, engineering design on the Site C dam and the contract to build BC Hydro’s John Hart Generating Station in Campbell River.
But SNC-Lavalin’s future is in doubt because it is facing a trial in Quebec on bribery and corruption charges related to work with the Gadhafi regime in Libya. If convicted, it would be blacklisted from federally funded work.
SNC-Lavalin lobbyist Sam Boutziouvis (Twitter)
SNC-Lavalin had lobbied hard for a new remediation law so it could avoid the courts. In 2018, Attorney General Jody Wilson-Raybould resisted pressure from the Prime Minister’s Office to overrule independent prosecutors who opted to seek a criminal trial. Wilson-Raybould was shuffled out of the Attorney General’s role in January and eventually ejected from Liberal caucus. She will run in Vancouver-Granville for re-election as an independent in October.
SNC-Lavalin also lobbied senior B.C. government officials at the same time as bureacrats were deciding the shortlist for the Pattullo and Broadway, despite tendering rules against lobbying.
theBreaker.news exclusively reported that SNC-Lavalin’s vice-president of government relations, Sam Boutziouvis, hired Whistler’s Richard Prokopanko last fall to arrange meetings with several deputy ministers and cabinet members. SNC-Lavalin officials met with several bureaucrats, but the only minister who was warm to the idea of meeting was transportation minister Claire Trevena. Boutziouvis and Trevena were scheduled to meet on budget day in February, but the meeting was postponed indefinitely after a death in Boutziouvis’s family.
SNC-Lavalin’s departure could also have ripple effects for the Surrey SkyTrain extension to Langley that is planned instead of a light rail transit system. Latest estimate for the project is $3.12 billion, nearly twice the $1.6 billion that had been earmarked for the LRT system that Surrey Mayor Doug McCallum cancelled after winning a comeback election.
Acciona’s team includes consultant James Burke, the former head of SNC-Lavalin’s B.C. operations and a former member of the SNC-Lavalin president’s office under the disgraced Pierre Duhaime.
Since leaving SNC-Lavalin in 2015, Burke was appointed to the project board for the Capital Regional District’s sewage plant and sat on a PartnershipsBC due diligence panel to review TransLink’s Broadway Subway business case.
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