Hospital cost remains about $300 million: minister
P3 project deserves close oversight, MLA says
Shane Magee
Northern News Services
Saturday, September 5, 2015
SOMBA K'E/YELLOWKNIFE
The territory's finance minister says the bid for the Stanton Territorial Hospital expansion project that's expected to begin this year has come in around $300 million.
Stanton Territorial Hospital is nearing its retrofit, being undertaken as a P3 project. Although details of the contract are unclear, Finance Minister Michael Miltenberger told Yellowknifer it's expected to be in the $300-million range. - NNSL file photo
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"It's within the $300-million range," Michael Miltenberger told Yellowknifer about the bid, which remains cloaked in secrecy until an agreement has been signed with the preferred proponent, Boreal Health Partnership.
It's a figure that's been thrown about for some time regarding the public-private partnership, or P3, project.
P3 means the private group assumes the risk and finances the construction.
The GNWT still must work through "reams of details" with Boreal prior to an agreement being signed, Miltenberger said.
"If everyone signs off and we have a deal, then it goes into the public realm," he said.
The details, such as the financial amount of the two other bids that were not successful, will not be released.
The minister was asked what assurances he could provide the public that the P3 project won't balloon in cost, similar to the Deh Cho Bridge.
"If you look across the landscape, we had projects government built and the bridge - which wasn't a P3 - that had some cost overruns," he said. "We've had cost overruns in other areas as well. We've worked very hard, the vast majority of our projects come in on time and on budget."
He called it the biggest capital project the GNWT is working on, adding the government has a good track record when it comes to building hospitals. Miltenberger did not elaborate with specifics.
The Deh Cho Bridge was initially conceived as a P3 project, but in a 2011 report, the Auditor General of Canada states the GNWT did not shift any significant risks to the private partner, as anticipated when a P3 procurement was selected. The ballooning cost of the project meant the GNWT took on more of the cost, which the auditor led to the determination it wasn't a P3 project "as no significant risk was ever assumed by the private partner."
Range Lake MLA Daryl Dolynny said the GNWT must be cautious to avoid past mistakes in the final days of the 17th Legislative Assembly.
"This will be, at the end of the day, one of the largest expenditures on our books," he said. "We have to be very careful as well."
He'd like more information disclosed as soon as possible for the public to be able to review.
"We're getting the impression that this is almost a done deal," he said.
Dolynny questioned why there was a need to consider P3.
"I think you have to back the bus up and ask whether the P3 was required," he said, calling a GNWT policy on the process "lackluster" in his opinion.
The territory has a policy that capital projects over $50 million should be considered as a P3 project.
"We put out a request for proposals, we did all the front-end work, we looked at the literature and got all sorts of feedback both pro and con and put out the call and picked a preferred proponent," Dolynny said.
