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Bridge Corp faces lawsuit

Amanda Vaughan
Northern News Services
Published Friday, August 24, 2007

YELLOWKNIFE - Stalled by environmental hearings and rising costs, the Deh Cho Bridge faces another potential delay, this time from a lawsuit filed in June by a Quebec-based steel supplier.

Canam Group Inc. is suing Deh Cho Bridge Corporation, alleging breach of contract, and is seeking unspecified damages and an injunction that would prevent the bridge builders from purchasing steel from another company until the case goes to trial.

In its statement of claim, Canam said the Bridge Corp. negotiated a contract for the fabrication of all the structural steel needed for the $150 million span across the Mackenzie River.

The statement said that two engineers who were contracted to the Bridge Corp. told Canam in March 2007 that completion of the contract was waiting on approval of additional funding, to cover the sharply rising costs of the project.

In May, the Bridge Corp. told Canam that they had decided to hire a general contractor rather than handle separate contracts for the different components of the bridge and would no longer need Canam's services.

The Bridge Corp. filed a statement of defence in July and denied entering into a contract with Canam. It said that the two engineers, Andrew Gamble and Jivko Jivkov, did not have the authority to enter into contracts.

"It was made clear to (Canam) both verbally and in writing, that Gamble and Jivko could only recommend terms and conditions of a contract to the Bridge Corp.," the statement said.

"A contract would require the approval of the Bridge Corp., the Government of the Northwest Territories and the financing institution," the statement said.

Kam Lake MLA Dave Ramsay is worried about who will be footing the Bridge Corp.'s legal bills, which could add to the price of the project that was estimated several years ago at $40 million.

Premier Joe Handley said "any liabilities borne by the Bridge Corporation would be paid for out of their profits from operating the bridge."

Created by the GNWT to manage construction and operation of the bridge, the Bridge Corp. operates on a $5 million loan from the government. The project is to be paid for with revenue from a $6 per tonne toll on commercial traffic, and $2 million a year diverted from ferry and ice road budgets.

The GNWT is also seeking $50 million from the federal government's infrastructure program. Federal officials say the territory is eligible for $25 million under the program this year and another $25 million in 2008. Until the federal money arrives, the bridge projects will need an additional $2 million a year from GNWT general revenues.