BC Hydro is poised to award the second-largest contract for the Site C dam, even as Ottawa mulls whether one of its preferred contractors is running afoul of foreign-ownership limits.
The Crown corporation announced in December that it has selected the Aecon-Flatiron-Dragados-EBC partnership as the preferred proponent for the large civil-works contract that will include the powerhouse, penstocks, spillways and power intakes for the $10.7-billion dam.
Investment Canada is scrutinizing the recent takeover of one of the partners, the construction giant Aecon Group Inc., by a state-owned Chinese corporation, CCCC International Holding Limited (CCCI). A decision was due on Jan. 26 but last-minute lobbying against the takeover may have delayed a decision.
The B.C. NDP government, which recently gave the green light to complete the Site C dam, has been mute about the details of the contract. Energy Minister Michelle Mungall did not return requests for comment. A spokesman from her ministry could not say if the contract would be awarded even if Ottawa has not approved the takeover.
The Globe and Mail reported earlier this month that Canada's largest construction companies are urging the federal government to block the proposed $1.5-billion acquisition of Aecon by CCCI.
Investment Canada must conclude that the deal is of net benefit to Canadians, and that it poses no threat to national security, in order to approve the foreign investment. An official with Innovation, Science and Economic Development Canada said Friday they can't disclose if a decision has been made "due to the confidentiality provisions of the Investment Canada Act."
Tom Sigurdson, head of the B.C. Building Trades, advocated for the project but now he wants assurances from BC Hydro that Aecon's new owners will not bring their track record for corruption and safety concerns to this project.
"We have made significant improvements in construction safety in Canada but we still have too many deaths due to worksite incidents… We are not going to take a step backward with any contractor that successfully bids for work on any project in Canada," he said. "There are hard conversations to be had with BC Hydro."
A spokesperson for Aecon said Friday the company has not been told of a decision from Investment Canada. Meanwhile, the firm expects a final decision from BC Hydro soon.
The public-policy think tank Macdonald-Laurier Institute, in a report last December, said the CCCI-Aecon deal is not in Canada's interest, and noted that the "notorious" parent company of CCCI, China Communications Construction Co., has "engaged in fraudulent business practices across multiple countries" that led to a lengthy suspension of the CCCC from bidding on any World Bank projects.
But the civil-works contract for Site C must be awarded soon – the project calls for the contractor to mobilize to the site this spring. If Ottawa continues to drag out its review, BC Hydro will make its decision before Aecon's ownership has been cleared.
It is not surprising the provincial government is quietly squeamish about this. The awarding of this contract will make up a substantial part of the most expensive public-infrastructure project in British Columbia's history.
If the bid is much higher than budgeted, if there are labour problems, if there are construction delays; anything that goes wrong now hangs entirely on Premier John Horgan's government. Cost overruns are more than a potential political embarrassment – BC Hydro's debt load has already been flagged as a potential threat to the province's credit rating.
When he announced the project would continue in December, Mr. Horgan said he did so with "a heavy heart…This is not a project we would have started," he said. With $2-billion worth of work already completed, the dam was too far along to stop, he said.
The project has been deeply divisive for the NDP. With 1,100 megawatts of capacity, the Site C dam will provide enough energy to power the equivalent of about 450,000 homes a year. But it will flood 55 square kilometres of river valley and an environmental review concluded it will have negative effects on wildlife, agricultural land and First Nations' communities.
Having gone out on a limb to approve a project that he had previously criticized, Mr. Horgan has promised a higher level of scrutiny to ensure the project is completed on time and on budget. That commitment only heightens the level of accountability by his government for the Crown corporation's handling of the project