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Yellowknife, 1 March 2011-While the Government of the Northwest Territories and the Department of Transportation identified key risks associated with building the Deh Cho Bridge using a public-private partnership, they did not manage them adequately, says Sheila Fraser, the Auditor General of Canada, in her Report delivered today to the Speaker of the Legislative Assembly. As a result, the project has seen delays and cost increases.
"The Deh Cho Bridge is the largest public infrastructure project ever undertaken in the Northwest Territories," said Ms. Fraser. "While it was initially presented as a $55 million project, the Government now says it will cost $182 million."
The audit found that the agreement between the Government of the Northwest Territories (GNWT) and the Deh Cho Bridge Corporation was not actually a public-private partnership as it was called, because the GNWT assumed all the major project risks. The risks to schedule and cost significantly increased when the GNWT waived approval of the bridge design so construction could start, despite the Department's concerns about the design. Unresolved design issues caused cost increases and project delays.
The Department of Transportation took over the project when the Deh Cho Bridge Corporation was declared in default of a $165-million Government-guaranteed loan. The audit found that the Department has put a framework in place to manage the key risks. However, some of the risk mitigation measures are too general to be useful. While quality assurance and quality control have improved, risks remain in the areas of the project's schedule, scope, and cost.
"The Department needs to assure the Legislative Assembly and the public that it has measures in place to manage the risks that remain," said Ms. Fraser.
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The Report "Northwest Territories Deh Cho Bridge Project" is available on the Office of the Auditor General of Canada website.
For more information, please click here.