Question re: Ketza River mine project - December 10, 2014

Mr. Silver:   A few weeks ago, I asked a question of this government about the Ketza River mine property near Ross River. It concerned the government accessing a $3-million reclamation fund attached to the property to fund maintenance work on the access road and bridges. There is also work with respect to the tailing facilities on-site. I would argue that this money was supposed to be used to close the mine and not finance maintenance work.

The minister mentioned that the government had retained the services of a consulting firm to manage the project. What he didn’t say was that the contract to this firm was awarded without competition. Why did the government bypass the competitive bidding process and give out a $2.8-million contract without competition?

Hon. Mr. Kent:    I thank the member opposite for the question. When it came to this particular issue, the normal bid-solicitation methods favoured by the Yukon government were not employed because immediate action was necessary to prevent the tailings storage pond from failing in the next freshet, or the next runoff or spring melt.

Department officials in Compliance Monitoring and Inspections brought all this information to me, as the minister, and we had to make a decision. Obviously we didn’t want to jeopardize or put at risk any environmental or human health and safety aspects with respect to this tailings pond. Of course we are all familiar with recent events in British Columbia.

So, again, the work was required to be undertaken as soon as possible and that is why we awarded this contract outside of what the normal and the preferred tendering process is.

Mr. Silver:   I do appreciate the answer from the minister, but one of the comments that this government made to Yukoners is that to maintain a level playing field and support businesses and ensure that government funding or government actions does not foster unfair competition within the business community. Picking one company and deciding to give out $2.8 million without asking anyone else if they would like the opportunity to bid on this is hardly a fair playing field. I am sure that there are many local businesses in the Pelly-Nisutlin riding who would have jumped on the opportunity to bid on this work.

When it comes down to the decision-making process here — who did make this decision? Was this a Cabinet decision, or was this the minister himself making the decision to directly award this contract?

Hon. Mr. Kent:    The firm that the member opposite refers to was selected by the branch as the project manager for the Ketza mine interim work project. The company, as mentioned, was selected on the basis of expertise in the fields of site assessment and remediation, as well as its familiarity with the Ketza River mine site.

As mentioned, we would have preferred to have gone through a normal tendering process, but given advice that I received from the Compliance Monitoring and Inspections branch, there is a real possibility that the tailings dam could have failed in the spring freshet and that is why I made the decision, based on the recommendation from departmental officials, to proceed with the direct-award process to this environmental firm to manage the project.

That said, we did ask them to ensure that local companies were provided with opportunities to bid on work. There are several local companies that are working on the site, including one referenced by the Leader of the NDP recently, Dakwakada, or Castle Rock Enterprises. They are also working on-site and providing assistance to Hemmera to ensure that we don’t see any environmental concerns with respect to this tailings facility in the spring freshet period.

Mr. Silver:   It is very refreshing to hear the minister take responsibility for this, so I do applaud him for that. I do have to put it on the record, again, that it is disappointing to see a government bypass the competitive bidding process and simply awarding this contract without competition. There are plenty of local companies who would have been qualified to do this work, but were never given the opportunity to bid on this $2.8 million — no bids were required.

Mr. Speaker, the government’s decision to spend reclamation dollars on road and bridge maintenance begs the question of: Who will be paying the bill for the actual reclamation? When I asked this question earlier this sitting, the minister said that the purpose of the work being done is to bring — and I quote: “the site back to compliance.” It begs the question: What laws or licences is the property not in compliance with currently?

Hon. Mr. Kent:    The project, totalling $2.79 million, is broken into a number of specific tasks. One, of course, is the site access upgrades that the member opposite referred to, totalling $1.4 million. Occupational Health and Safety required that work be done and we obviously needed the road to be in shape so that the people working on-site could access the mine site. The second is with respect to on-site infrastructure; third, tailings dam seepage control; and fourth, surface-water management.

I think the member opposite, when he raised this question earlier in this sitting asked about a water licence with respect to the site access upgrades. There wasn’t one required for that. The Ketza mine — the proprietor of the company that has the Ketza mine has not had a water licence on that site for a number of years, so there is no water licence in position.

Again, just back to what the member opposite started with — with respect to the tendering aspects for this project — of course I would have much preferred to have seen this go to a competitive bid and have that process honoured but, again, after receiving advice from officials in Compliance Monitoring and Inspections — again, this was my call as the minister. I had to approve the master services agreement. I felt that the environmental consequences outweighed the opportunity to go through the regular tendering process.