Kerry McCluskey
Northern News Services

Iqaluit (Nov 11/02) - A contract worth up to $75 million went South when Shell Canada and Imperial Oil put in winning bids for Nunavut's fuel resupply.

Northern Transportation Company Ltd. (NTCL) held the contract since 1996.

Shell is now responsible for supplying fuel in the Baffin and Kivalliq regions. Imperial will look after communities in the Kitikmeot. The contract, awarded Oct. 31, lasts for three years and has extension options.

Public Works Minister Peter Kattuk told the Legislature the contract is good for the government.

"These new supply contracts ... represent significant savings to the Government of Nunavut," said Kattuk.

Kirk Vander Ploeg, a manager with NTCL in Iqaluit, expressed regret over the lost contract.

"We were disappointed that we weren't able to maintain the contract as is, but it's hard to fight (the oil companies)," said Vander Ploeg.

Supply contract split up

Until recently, a single three-year contract was awarded to cover both the supply and delivery of fuel.

The company with the winning bid purchased 115 million litres of fuel on behalf of the government.

They would then deliver it to Nunavut communities during the sealift season.

According to Vander Ploeg, the government told NTCL earlier this fall they'd decided to split the contract into two components -- one governing resupply and the other transportation of the fuel.

The former contract was worth an estimated $100 million. Vander Ploeg estimated fuel costs accounted for about 75 per cent of the contract.

NTCL also submitted a bid for the delivery portion of the contract.

It is expected that the government will announce the winner of that bid sometime this week.

Bad gas not considered

Public Works deputy minister Ross Mrazek said there was no connection between the government's decision to split the contract and the bad gas NTCL supplied the territory with last year.

The gasoline was missing a cleansing additive and caused severe engine trouble in vehicles in the Baffin and Kivalliq regions.

The government is still trying to settle hundreds of insurance claims.

"(The decision) had nothing to do with that whatsoever," said Mrazek.

Though he acknowledged awarding the contract to Shell and Imperial has the potential to hurt NTCL, Mrazek said the government's priority was to get the best value for its dollar.

"Splitting the contract allowed the government to buy the fuel directly from the supplier. This is definitely more economical," he said.

NTCL is owned by the NorTerra Group of Companies, a joint venture between the Nunasi Corporation and the Inuvialuit Development Corporation.