Delaying Site C is costly
The Canadian Press - Sep 11 - BC Biz

Image: BC Hydro

A new report concludes that it would be cheaper to cancel the Site C dam than to delay the $8.8-billion megaproject in northeast British Columbia.

The report by auditing firm Deloitte LLP says that pausing the project until 2025 would cost approximately $1.4 billion, while cancelling it outright would cost $1.2 billion.

Deloitte was tasked by the B.C. Utilities Commission to examine the costs to ratepayers of suspending or terminating the dam and whether it is on time and within budget.

Premier John Horgan’s NDP government has asked the commission to review the economic viability of the project and the commission will consider the Deloitte report as part of its review.

The report says the project is facing significant schedule and cost pressures, including the possibility of missing a river diversion milestone in 2019 that could inflate the overall price tag to more than $12.5 billion.

It also says Site C faces major risks including performance issues of contractors, unforeseen geotechnical conditions and cost risks related to major contracts that haven’t been awarded yet.

“These risks could impact the cost and schedule performance of the project,” the report says.

A decision to suspend the project until 2025 would trigger the close-out of the existing project and require a new project to be defined, including scope, budget and schedule, the report says.

Based on the current status of the project, existing contracts and agreements and anticipated activities to demobilize, preserve, safeguard and remobilize the site, the total cost of suspension would be about $1.4 billion, it says.

Terminating the project would require BC Hydro to withdraw from the site, return it to its natural state that supports long-term wildlife and vegetation and close out liabilities, bringing the cost of cancellation to $1.2 billion.

The utilities commission is expected to deliver an interim report by Sept. 20 and a final report by Nov. 1.


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