The BC Utilities Commission (BCUC) needs more data to properly analyze the Site C dam project, a preliminary report released from the commission shows.
While the review panel determined that the project is, as of June 30, on time for a final in-service date of November 2024, they found it more difficult to assess whether the project is on schedule for a river diversion in 2019.
According to the report, if the diversion milestone was missed, it could have a significant effect on the project budget and the schedule.
And the project is already hitting a snag with issues on the left bank where two tension cracks have formed. A 400-metre tension crack appeared on the left bank of the dam site in February, which temporarily stopped some construction activities.
According to BC Hydro, the issues from the first crack have since been resolved with the schedule remaining within estimates. However, a smaller tension crack was observed on the left bank of the dam site in May.
According to the report, these issues have led to slow progress on the left bank and could jeopardize hitting the river diversion milestone. BC Hydro believes it can recover the time and money lost and still hit the milestone while remaining on budget.
The panel stated it wants BC hydro to connect with its contractors to better assess the impact the tension cracks and delays could have on hitting the milestone. BC Hydro still plans to start diverting the Peace River by Sept. 1.
When assessing project spending, the panel stated it wasn’t able to determine if the project is on budget. The report stated the review panel requires more information on the current assessment of project spending, the value of outstanding claims and projected use of budget contingency.
It cited a report by auditing firm Deloitte which noted BC Hydro lacks a "clear method…to measure (the) per cent complete."
The report added this suggests the figure of $1.8 billion spent to date might not represent the spending that should have occurred to date.
The panel is now asking BC Hydro to provide a point-in-time assessment of its progress to June 30, using the earned value method, including analysis of schedule variance, cost variance, schedule performance and cost performance as compared to both the Final Investment Decision (FID) and PMB plans.
The panel is also asking BC Hydro to provide a detailed analysis of the claims outstanding for work completed or in progress including the amount claimed and BC Hydro’s assessment of the final settlement amount.
BC Hydro’s submissions to the panel state it expects to finish the project on budget and doesn’t expect to use the additional $440 million it has in reserve. It supported this by adding that it has an "appropriate level of…cost contingency" and that it has "more unused contingency now than at the time of the Final Investment Decision."
In total, the report issued 37 preliminary findings and asked more than 70 follow-up questions to BC Hydro.
The Progressive Contractors Association of Canada (PCA) states it is continuing to emphasize the importance of the value of the project and the employment opportunity it creates for all workers and companies through its "Open Managed Site" model.
Rieghardt van Enter, BC regional director for PCA, stated in a release that turning back on the project now is not a "practical option."
"Jeopardizing the livelihood of so many B.C. skilled tradespeople and the communities where they live, is not the right thing to do," he said.
The Independent Contractors and Businesses Association of British Columbia previously blasted the review in a statement, citing the numerous hurdles the project has already had to go through.
"It was signed off by both the federal and (previous) provincial governments. Its environmental study alone was 29,000 pages – a stack of paper taller than an NBA basketball hoop," said ICBA president Chris Gardner.
Tom Sigurdson, executive director for the BC Building Trades, sees the review as something that was skipped over when the Liberals were in power and were eager to get the project going.
"I don’t see this as being at all out of step with past practice although it is unusual for a project that is underway," said Sigurdson in a previous interview with the Journal of Commerce.
Public hearings for the review will begin this month in Vancouver and Hudson’s Hope. Next month there will be hearings in Fort St. John.
Premier John Horgan tasked the BCUC with analyzing the financial impacts of building, scrapping or delaying the project back in August. The full report from the BCUC will be issued on Nov. 1.
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