Thursday February 09, 2012


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    NWT legislature considers taking over $180-million bridge project

    YELLOWKNIFE - It began as a way to open up the North, eliminate the annual need to helicopter supplies into its largest city and ease the feeling of isolation that comes when access to the rest of the world depends on the whims of weather and water.

    But it has been a rough crossing for the first bridge on the mighty Mackenzie River, Yellowknife's longed-for link to the south.

    On Tuesday, the Northwest Territories legislature is to begin a special session to vote on taking over the $180-million Deh Cho Bridge from the public-private partnership that started it.

    It's the latest act in a saga that has seen costs triple, original designs discarded mid-project, contractors replaced and territorial officials hastening to Ottawa for a deal to allow the N.W.T. to increase its borrowing power.

    "It didn't all flow according to plan," concedes the territory's deputy premier and finance minister, Michael Miltenberger.

    Yellowknife MLA Dave Ramsay, a persistent critic of the project, puts it a bit more directly: "We were fooling ourselves and it came back and bit us pretty hard."

    The dream of a bridge across Canada's longest river has been around for decades. The highway's only river crossing is at Fort Providence, on the western side of Great Slave Lake. In summer, traffic moves only during the ferry's daytime operating hours, and it doesn't move at all in bad weather. In winter, vehicles use an ice road. And for a few weeks every spring and fall when the ice isn't safe, nothing moves except by air.

    "Groceries have to be helicoptered over the Mackenzie River," says Transport Department spokesman Earl Blacklock.

    People plan their travel around the state of river. Stores in Yellowknife build extra warehouse space because they can't count on prompt resupply.

    In 2001, Fort Providence and local aboriginal bands developed a plan to build a kilometre-long bridge through a self-financing, public-private partnership. The estimated $50-million cost would be paid through a $6 per tonne toll on commercial traffic. The territorial government would contribute money saved from not running the ferry or the ice road.

    Proponents formed the Deh Cho Bridge Corporation, borrowed money for construction and were to own and operate the bridge for 35 years. The Deh Cho Bridge Act was passed in 2003 and the financial agreement finalized in 2007. The bridge was to open in November 2010.

    But construction costs ballooned as the corporation found itself competing for materials and workers in Western Canada's resource-driven economic boom. By 2008, the price-tag had grown to $150 million - enough to force the territory to promise an extra $2-million annual subsidy.

    Worse, the bridge had to be redesigned after its piers had been erected and placed in the river, when it was discovered the superstructure wouldn't meet safety codes.

    Banks backstopping the project were growing nervous and demanded to see a detailed redesign by last Jan. 29. When they weren't satisfied, they declared a default, bringing the structure of the project crashing down.

    The original contractor, ATCON Construction from New Brunswick, was removed and replaced. And now the territorial government is being forced to do what critics had warned about all along - take over the project and assume the entire $165-million debt.

    That's a large enough hit that the N.W.T. is asking the federal government to increase the amount of money it may legally borrow.

    Miltenberger concedes that haste has damaged the project. Construction began before plans were final. Financial arrangements came before the legislature two days before the session dissolved and MLAs began an election campaign.

    "That's been the political concern that's been raised very clearly to us," Miltenberger says. "No government going forward will be making such major decisions at such a late date in its term."

    Still, he says that when the bridge eventually opens - the target date is now November 2011 - it will all be worth it.

    The cost of living in the North will fall. A major transportation bottleneck will be removed for businesses and resource developers alike. And people will lose some of their sense of isolation.

    "I watched years ago when they put the fixed link with P.E.I., with the heated debate and the issues surrounding the design," says Miltenberger. "My own sense now is that nobody would want to turn back the clock, and the same is going to be in the N.W.T."

    Others aren't so sure.

    A 2007 analysis found that cost overruns had taken the bridge from a $39-million net benefit to a $50-million net cost. The same analysis found that while Yellowknife's cost of living would decrease slightly, the bridge toll would actually increase costs for resource companies resupplying mines.

    Ramsay predicts tolls will just be passed on to northerners.

    "Consumers are going to pay more. I guarantee it."

    He says the project is simply a bridge too far for a government that depends on Ottawa for nearly three-quarters of its revenue.

    "This bridge is going to impact on our ability to do other things," Ramsay says. "We put all our eggs in one basket with this bridge."

    Still, Ramsay agrees that at this point, with eight piers in place marching across the Mackenzie, there's no choice but to finish the Deh Cho Bridge.

    "At this stage of the game, we've got a lot of money hanging out there. We've got to move the project forward."

    -By Bob Weber in Edmonton


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