OTTAWA — Delays in approving the new Champlain Bridge cost taxpayers $500 million in avoidable expenditures, the Auditor General has found, while “flaws” in Ottawa’s analysis of the project also unnecessarily inflated its initial cost estimates.
In a report released Tuesday, the auditor said it was unlikely the private consortium leading the project would finish construction on time, and said that meeting its December 2018 completion date would be “very challenging.”
The Champlain Bridge, which spans the St. Lawrence River in Montreal, was approved in October 2011 and is expected to cost $4.2 billion. The old Champlain Bridge was less than 50 years old but had deteriorated quicker than expected, forcing authorities to close lanes and restrict the flow of traffic. Delays in approving the new project inflated government costs by half a billion dollars, while also causing additional economic losses for Montreal and the surrounding area.
The report also found that Infrastructure Canada’s decision to use a private-public partnership (P3) model came two years before it had actually completed its procurement analysis, which “contained many flaws.” It said Ottawa would have saved money using a traditional procurement model, and that the government could not fully explain the $1.5 billion in savings it claimed to achieve through the P3 model.
“In our view, the Department’s analyses indicated savings that were unrealistic,” the report said.
The report comes as Ottawa rolls out its $186.7-billion infrastructure spending program, stretched over 12 years, which has faced criticism for delays in designating specific projects for funding.
The plan is made up of roughly $92 billion in spending that was designated under former prime minister Stephen Harper, while the Liberal government announced billions more in spending in its 2016 budget in a bid to stimulate the economy.
Prime Minister Justin Trudeau’s plan to run annual deficits to fund major infrastructure expansion was a key campaign promise. Ottawa had initially promised to eliminate the deficit by 2019, but has since abandoned that claim.
The private consortium led by SNC-Lavalin Group Inc. has repeatedly said it would complete the project before the end of year deadline. The cost of the Champlain Bridge contract is roughly $3.9 billion.
Labour strikes have delayed construction on the project, while weight restrictions caused delays in getting certain heavy materials needed to build the bridge.
If the bridge is delayed, Infrastructure Canada can impose penalties of $100,000 per day for the first week and $400,000 per day after that, up to a maximum of $150 million.
In its recommendations, the Auditor General said Ottawa would need to shift its procurement processes in order to meet future deadlines on time and within budget.
“After completing the construction of the new Champlain Bridge, Infrastructure Canada should create realistic benchmarks for construction costs, risk evaluation, and efficiency rates in value-for-money analyses, for use in future requests for proposals for infrastructure projects,” it said.