Back in December, as the price tag for the Site C dam spiralled another $2 billion, B.C. Premier John Horgan announced the creation of a new board for “enhanced oversight” to ensure the project would be delivered on time and within its newly inflated budget.
Curious about why the NDP government would create a brand new “project assurance board” — instead of reinstating the oversight role of the B.C. Utilities Commission after the BC Liberals sent it packing — The Narwhal subsequently asked for a list of board members and if the board’s findings would be public.
In April, we were told by the B.C. energy ministry that a “broad search” was underway to find “highly-qualified, independent [our emphasis] external advisors with expertise in engineering, construction and management of large, complex infrastructure projects.”
It was taking some time, the energy ministry said in an e-mailed statement, because it was difficult to find “the kind of specialized skills, experience and independence from BC Hydro that we are looking for in the independent advisors.”
But neither the list of non-BC Hydro board members nor the board’s findings were ever disclosed.
Court documents reveal details about secretive board
That’s perhaps not surprising, given that international hydro dam construction expert Harvey Elwin recently testified he has never encountered the extent of secrecy surrounding the Site C project in five decades of working on projects around the world, including China’s Three Gorges dam.
Elwin testified for an ongoing First Nations court case against the Site C dam, now a $10.7 billion project.
The legal case seeks to halt work on the Peace River project, pending a full civil trial to determine if the dam violates treaty rights.
Among thousands of pages of court documents, several reveal details about the elusive Site C project assurance board, which has been meeting since January.
In keeping with Elwin’s expert witness testimony, an agenda from a January board meeting has this note at the bottom of the page: “Please ensure to destroy or delete all materials following conclusion of meeting.”
“Independent” is far from the word that should be ascribed to the new board, which primarily consists of members of BC Hydro’s board of directors. The board’s terms of reference, released in court documents, state it will have “up to two” independent advisors.
‘Independent’ board member authored pro-Site C report for construction trade unions
One of those advisors is energy consultant Lorne Sivertson, former president of Columbia Power Corp. and the author of a pro-Site C report for B.C.’s construction trade unions that was used last fall to discredit an independent report by the watchdog B.C. Utilities Commission.
The BCUC report found the Site C project could cost more than $12.5 billion while other renewable energy sources could provide the same amount of power for $8.8 billion or less.
Sivertson’s report was released at a Vancouver press conference, prior to a second pro-Site C press conference in Victoria also organized by construction trade unions.
In an e-mailed statement, the energy ministry told The Narwhal that additional board members are being recruited and more information about the board will only be made available when “the full composition of the board is finalized.”
Les MacLaren, assistant deputy minister in the energy ministry, is one of the board’s two government members. According to MacLaren’s testimony for the First Nations court case, he is the top civil servant responsible for approving Site C briefing notes for ministers and conversing with ministers about the project, a role he has had since 2008.
The other civil servant on the board is Lori Wanamaker, who was deputy solicitor general in the Christy Clark government and was appointed deputy minister of finance by the NDP.
Wanamaker, along with deputy energy minister Dave Nikolejsin, challenged the BCUC’s final findings about the Site C project in a six-page letter to the commission that seemed to suggest the NDP government was searching for a rationale to continue the project.
Six BC Hydro directors sit on the assurance board, which BC Hydro refers to on its website as a BC Hydro “committee.”
They include John Nunn, who was Site C project’s chief project engineer. Nunn worked for the engineering and consulting firm Klohn Crippen Berger, a Vancouver-based company that holds a current contract, along with SNC-Lavalin, for “design services” on the Site C dam project, according to BC Hydro.
Another BC Hydro director on the project assurance board is civil engineer John Ritchie, a former senior consultant for Hatch, an engineering and consulting firm BC Hydro hired to work on Site C. Together with Klohn Crippen Berger, Hatch holds a long-term contract with BC Hydro to work on dam safety projects that “may include dams and spillways,” according to an announcement of the agreement on Klohn Crippen Berger’s website.
The assurance board is chaired by Kenneth Peterson, who is also BC Hydro’s executive board chair, and its terms of reference state that BC Hydro president Chris O’Riley will be invited to join board meetings, provided they are not held in camera (meaning in private).
Ernst & Young appointed to assist board prior to Site C decision
A non-voting board member, Mike Kennedy, hails from the accounting firm Ernst & Young, commissioned by BC Hydro in 2016 to review the Site C project.
That review by Ernst & Young — which donated $160,000 to the BC Liberals and about $13,000 to the B.C. NDP between 2005 and 2017, according to Elections BC — found BC Hydro had appropriate processes in place to meet Site C project milestones and financial targets.
Twelve months later, BC Hydro admitted that diversion of the Peace River, a major project milestone, was a year behind schedule and, two months after that, the NDP government announced a $2 billion cost overrun.
The terms of reference for the board state that Ernst & Young was selected in November 2017 to provide “independent project oversight services” to the Site C project assurance board.
That date is important because it indicates that plans were underway to proceed with the Site C project in advance of the December 6 meeting at which Cabinet reportedly made its final decision.
How well is that ‘independent oversight’ working?
In announcing the new board, the NDP said it would enhance oversight for “future contract procurement and management, project deliverables, environmental integrity, and quality assurance” so the Site C project could be delivered on time and within its new budget.
Here are some developments on that front since the board began meeting in January.
Progress on contract procurement so the project can be delivered within budget: In mid-March, a major Site C contract — to build the project’s generating station and spillways — was awarded for $350 million more than documents (accidentally released last fall) revealed BC Hydro had budgeted.
Progress on project deliverables: Elwin laid out in great detail in his affidavit why there is an “extremely high probability” of at least a one-year construction delay, contradicting public assurances from BC Hydro and B.C. energy minister Michelle Mungall that the project is now on track. You can read his affidavit here.
Progress on environmental integrity: On May 14, BC Hydro was hit with an order from B.C.’s environmental assessment office to control runoff water, soil erosion and sediment on the dam construction site — after BC Hydro failed to comply with a previous order to put a plan into place. BC Hydro also failed to comply with two other conditions in its environmental certificate regarding environmental management planning and sediment.
Progress on quality assurance: In his testimony, Elwin flagged an “unusual” emphasis on work quality in a document from Site C’s technical advisory board. “In my opinion, it is the sign of a large performance problem with the MCW [Major Civil Works] contractor meeting the requirements of the specifications and quality of work,” Elwin said. This situation is “nearly always” accompanied by serious delays in work due to quality issues, he noted. “If the poor quality of work does not get turned around, it will continue to affect the performance and production of work and raise the likelihood of further delay and that the current Project Milestones will not be met.”
Overall project health: In its latest quarterly report, filed in July, BC Hydro classified the overall health of the project as ‘red,’ or having serious concerns. BC Hydro claims Site C project health is now in the ‘yellow zone’ — not in the healthy ‘green’ zone — but details about BC Hydro’s updated assessment will have to wait until the public utility releases its next Site C quarterly report in October.
Who is ultimately responsible?
It was a BC Liberal government that made the decision to proceed with Site C in the first place, but the NDP decided to continue the project, following pressure from NDP insiders and construction trade unions that donated generously to the party.
The NDP now shoulders responsibility for every single Site C project cost overrun and schedule delay.
Given the fast ferry scandal almost 20 years ago that booted the NDP government out of office for cost overruns and mismanagement — on a project a fraction the size of the Site C dam — the NDP might be well advised to follow the same advice they themselves repeatedly gave to the BC Liberal government: reinstate the BCUC’s independent and transparent oversight, effective immediately.
The government, which came to power promising transparency and fiscal responsibility, owes British Columbians nothing less.