SOMBA K'E/YELLOWKNIFE - A situation Premier Floyd Roland called a "worst-case scenario" two years ago became reality this week as the territorial government took over the $165 million debt for the Deh Cho bridge.

MLAs voted to assume the debt for the project, but not before they raised questions about the bridge's design and the territorial government's ability to prevent further cost overruns.

The legislative assembly reconvened almost two months earlier than expected on Tuesday for an emergency session to address the finances of the half-built bridge, which is still slated to be finished by November 2011.

Putting the $165 million debt into the territorial government's books brings the territory's debt close to the $500 million borrowing limit set by the federal government.

Up until this point, the bridge debt was the responsibility of the Deh Cho Bridge Corporation under the terms of a public-private partnership. A concession agreement with the corporation left open the possibility for the GNWT to assume the project debt, but as late as February, Transportation Minister Michael McLeod insisted that wouldn't happen.

But the corporation was removed from the project management position in February after their contractor, ATCON Construction, was unable to complete the remaining work for the agreed-upon price of $165 million. The New Brunswick-based company has since filed for bankruptcy and in February, McLeod sought MLAs approval for an additional $15 million in supplementary funding to complete the project with a new contractor.

To ensure programs and services aren't affected, Roland said the territorial government has sought assistance from federal Finance Minister Jim Flaherty. He said he was fully confident the federal government would help the GNWT manage the additional $165 million in debt.

The federal Department of Finance "is working on the temporary adjustment that will allow us to go beyond that current limit that is set, again, relief from this project," Roland said. The premier was filling in for Finance Minister Michael Miltenberger, who was absent for the week due to personal reasons.

On Thursday, Drew Williams, the premier's press secretary, said no details on the adjustment have been finalized.

Kam Lake MLA Dave Ramsay said federal help doesn't solve the problem.

"(It's) something like a credit card and we've got ourselves up against our credit limit," Ramsay said in the legislative assembly. "We might be able to get a bit of a reprieve from the federal government ... but that $165 million is going to have to be repaid at some point in time."

He also questioned the structural integrity of the project, asking McLeod about concrete work that has been done on the piers, which are already in the water.

"I'm not an engineer, but they clearly show cracks, thermal cracks on a number of the south piers, they show scour rock that is nowhere near the diameter that it was supposed to be for and it's not even granite, it's limestone," he said.

Roland called Ramsay's questions "spin," but McLeod acknowledged there have been problems with the work that's been done up until this point.

"There is no doubt some deficiencies that we are dealing with," he said, identifying them as problems with scour rock, compaction and improperly sized bolt holes.

"There is about a total of $4 million that are calculated for deficiencies," said McLeod. He said that money is being carried over from the first phase of construction on the piers.

McLeod also admitted it was issues with the design that caused the lenders to pull out and demand the GNWT take over the project's debt.

The bridge project had already been delayed for a year because the original design had to be scrapped, and the Deh Cho Bridge Corporation had to hire a new design firm to finish plans for the bridge's superstructure.

The lenders who financed the project issued a notice of default in early February, indicating their independent engineer didn't consider the new design prepared by Infinity Engineering to be complete, said Earl Blacklock, a spokesman for the Department of Transportation. Part of the agreement with lenders stated that a new contractor and design would be finalized by March 1.

"They were not obliged to demand we assume the debt, our early indications were that they wouldn't but in the end they did," Blacklock said.

McLeod told the legislative assembly the lenders sent a follow-up letter on March 1. "It's pretty clear that they were feeling that there was a design default on the milestone that they set," said McLeod. "We don't agree, but there is no mechanism for us to appeal it or dispute it."

Blacklock said the letter indicated the GNWT wouldn't be able to draw from the construction account until it assumed the project's debt.

"Everyone agreed we'd met that milestone except that independent engineer," said Blacklock. He said the lenders were concerned the design wasn't complete, but said the remaining work on the tollbooth couldn't be finalized until further along in the project.

During almost eight hours of debate on Tuesday, several MLAs demanded the new project management team provide routine updates on the bridge's progress.

"There needs to be a better accounting. We fully realize that," Roland said.

On Wednesday, regular MLAs also passed a motion requesting the Auditor General of Canada conduct a special audit of the bridge project.

The supplementary funding bill, meanwhile, finally passed yesterday. Ramsay was the only dissenting vote. Seven regular MLAs and six cabinet ministers voted in favour. Miltenberger, Yellowknife Centre MLA Robert Hawkins, Tu Nedhe MLA Tom Beaulieu and Nunakput MLA Jackie Jacobson were absent for the vote.