Marred by years of mismanagement, internal squabbling and contract disputes, the massive renovation of Canada’s busiest transit hub is running millions over budget and behind schedule, raising concerns that one of Union Station’s main entrances may not be ready in time for the 2015 Pan American Games.
Hundreds of budget documents, e-mails, and reports obtained by The Globe and Mail through a freedom of information request and interviews with sources show a strained relationship between the city and the company hired to manage the development. Two high-level sources – one involved in an oversight capacity and another involved in the construction – say “tens of millions” have been wasted. Neither could be named because of confidentiality issues with the city.
Sources say most problems can be traced back to the lack of a working schedule. To this day, the city is still operating without an approved timeline for specific work, despite city officials repeated claims that the remaking of Canada’s busiest transit hub is on time and on budget.
“Walls would be built without knowing someone needed to do work behind it, so then they’d have to tear it down, do the work, and rebuild it,” said one source, a project veteran with access to high-level progress reports.
The second source said the city had been “reckless” with taxpayer dollars.
Richard Coveduck, Toronto’s director of design and construction, and the bureaucrat in charge of the project, wouldn’t say when asked if the city made a mistake in choosing to handle the complex Union Station renovation on its own, rather than hire a private firm.
“I mean I’m a city staff employee so I do what I’m told,” said Mr. Coveduck. “I don’t want to seem harsh in that last comment. The people that run the city, I think they’re doing their best, too. Sure, this is unusual, there’s no question this is unusual for the city to be directly executing an $800-million project.”
Mr. Coveduck acknowledges that there have been big problems. He said it was important to remember the complexity of the site: the building is 100 years old, there are heritage concerns, foundation issues and it is still operational, with more than 250,000 commuters using the hub every day.
He rejects the idea that tens of millions of dollars have been wasted. He said any overruns are typical of a build this size and that they are constantly looking for ways to save money going forward.
Sources and reports from consultants attribute much of the blame for the problems to Carillion Construction Inc., which manages the project. But the sources also point to the City of Toronto itself, for not taking action when problems first emerged, for continuing to claim things were fine when they were told they weren’t and for trying to take on the project in the first place.
The Union Station revitalization project – and its then-$640-million price tag – was approved by city in the summer of 2009, after all three levels of government agreed to funding. Carillion was brought on at the end of that year. The budget has increased multiple times since then, most recently last fall with an $80-million funding boost from council for heritage preservation.
Reports of trouble emerged early. In 2012 and 2013, the city commissioned a series of consultant reviews. Ingersoll & Associates, Stantec Consulting, and A.W. Hooker were given access to the site, paperwork and personnel. Each identified problems with Carillion. (The consultants would not comment, and the construction company declined repeated interview requests.) Glenn Hultzer from A.W. Hooker looked into a roughly $10-million fund earmarked for “self-performed works,” meaning construction Carillion could choose to do on its own, without going through a procurement competition with other firms.
Mr. Coveduck said it was important to give Carillion clearance to do some of the work themselves – especially in those early stages – so that the city didn’t lose valuable time, while the smaller job contracts were being negotiated.
The consultant at Hooker saw it a different way.
“Unfortunately it leads to a conflict of interest” between Carillion’s obligation to perform in the interest of the city and the company’s own desire “to generate more profits from works,” reads the report, which was obtained by The Globe and Mail.
Mr. Hultzer found inadequate “control measures” to contain costs and inadequate record keeping. He examined a snapshot of self-performed work done in July, 2012 and found that the vast majority of submissions included unverified work and labour.
Consultant Tom Ingersoll was asked to speak with city staff working on the project and then summarize their concerns.
“Money is being spent unnecessarily, construction details not being followed, too much internal fighting,” Mr. Ingersoll wrote in his April, 2013 report. He documented concerns about Carillion’s billing practices, missed deadlines and lack of a realistic schedule.
In his report, Mr. Ingersoll expressed some sympathy for those involved. “The Union Station Project is very unique from the standpoint that – to the best of my knowledge – there has not been an undertaking of this complexity and magnitude on a City of Toronto building previously.”
It was around that time that Carillion presented the city with a revised schedule option. The city, which hired Greig Cooke from Stantec to examine the proposal, rejected it.
Mr. Cooke wrote that the proposal “continues to be incomplete in content, contains constrained dates without supporting logic and is not adequate to track actual progress against planned dates.” Work continues on the project but there’s been no approved schedule.
Mr. Coveduck acknowledged that the development “has slipped,” but that they hope to recover lost ground through “float” time (a period of time laid out in a project in case of delays). The most pressing timing issue is the looming Pan American Games.
The province’s regional transit authority, Metrolinx, gave the city $92-million to complete two new concourse levels at Union Station. The first was supposed to be transferred over this month. Under the current framework, it won’t be done until at least October – which Metrolinx said is unacceptable. After the handoff, the agency will need three additional months to outfit the concourse with its own equipment.
One Metrolinx source said they are very worried it won’t be ready in time, but CEO Bruce McCuaig played down that concern, saying he was “reasonably confident” they could get it done, even if under the delayed timeframe.
Meanwhile, Mr. Coveduck said that the city has never paid for any of Carillion’s unverified work – some of which he said remains in dispute. As for the city’s future with the company, he said the goal is to finish the concourse. Later this year, officials will decide whether to look at finding a new construction manager.
“There is no question, whatsoever in my mind that if I was to have ended their contract in 2012, in the summer, that we would not achieve the York Concourse for the Pan Am Games because it would take too long to bring in and hire [someone else],” he said.
“You know sometimes there’s that old adage: you have to dance with the person you brung, until there’s a break in the dance.”