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Anger over new prison project

YCC contracts will be exempt from the Business Incentive Policy

Tara Kearsey
Northern News Services

Yellowknife (June 03/02) - Northern businesses lost their edge in bidding on the new prison when the government moved to cut rising construction costs.

On May 27, cabinet waived the Business Incentive Policy (BIP) for Phase 2 of the new Adult Correctional Centre now under construction in Yellowknife.

The policy gives Northern businesses a five and 15 per cent bid adjustment on contracts to allow them to compete more fairly with Southern competitors.

The move has the NWT Construction Association up in arms. The directors met in an emergency meeting Friday and are expected to issue a formal statement today.

"This is not only detrimental to the construction industry but to virtually every other business in the North," Don Worrall, executive director of the NWT Construction Association, said last week. "We intend to try to convince the cabinet to reverse this decision."

Association director Lauren McKiel said waiving the BIP is a "slap in the face" for all Northern businesses.

"Who is the mysterious person that made this decision? I'm mad as hell, I really am and I just won't stand for it. I don't think this is fair at all. To me this is a despicable act on the part of the cabinet to approve this," said McKiel.

As general manager of Elite Commercial Flooring Ltd., McKiel said he has invested more than half a million dollars in Yellowknife construction projects over the past year.

His business has supplied materials to projects all over the NWT and has benefited from the BIP.

"Suddenly now somebody thinks that they're going to save a great raft of money by opening it up to everyone down south who will come up here, buy a business licence, make a ball of money ... and head back down south again," he said.

McKiel said he "will do everything (he) can to get this horrific decision reversed."

Deputy minister of public works Bruce Rattray said the GNWT is looking to increase the level of competition for the contracts with hopes of receiving lower prices.

"The bids that we're getting in have been escalating ... it's a large project and we're getting hurt badly by the amount of activity there is on the construction market generally," he said.

Rattray said the project is not currently over budget, but "potentially over budget" depending on bids that come in on Phase 2. The budget for the two phases is $40.8 million.

He said he anticipated the NWT Construction Association would frown upon the decision, but said waiving the BIP is an isolated incident.

"This is not the thin edge of the wedge for the policy ... this is kind of a one-time deal here in order to try and deal with this particular budget for this particular project."

Although the GNWT hopes to save money by increasing competition, Rattray said Southern contractors are not used to working in the North anymore and may decide not to bid.

"So, whether or not we're going to be successful in increasing the contractor pool, I don't know. It's a bit of a shot in the dark."