Question Re: Watson Lake district office - March 31, 2014

Mr. Silver:   I have a question for the Minister of Highways and Public Works about another construction project this government has recently announced. This one is the new Watson Lake district office for the Department of Environment.

When the project was tendered in December 2013, the advertised price of the construction contract was $1.4 million. Can the minister confirm that this contract has been awarded at $2.1 million, 50-percent more than the advertised price?

Hon. Mr. Istchenko:           The replacement of the Watson Lake Department of Environment district office was tendered as a design/build project, and that means that the unit rate costs for the design and construction are combined. The cost of approximately $440 to $450 per square foot is considered reasonable for this type of commercial/industrial building in the design and the build model. We have estimated a project budget of approximately $2.1 million for this project, which includes the design and construction of the new building, as well as the demolition of the old building.

Mr. Silver:   When the new Watson Lake Environment office went to tender last winter, contractors were told that the job would be worth $1.4 million. There were three bids on the job, and the lowest was $2.1 million, so that is $700,000 over what the government had budgeted. The government decided to accept bids and had awarded the contract at 50-percent over what was budgeted.

So can the minister explain how awarding this contract can be called good financial management?

Hon. Mr. Istchenko:           As I said earlier, when it comes to design/build, there are costs associated with the pricing on that. The budget is approximately $2.1 million; it’s Ketza Pacific. I know there are local contractors in the Yukon here and, if you look at our budget, there is more than just this project out there. There are lots of construction projects going on. We see it with F.H. Collins. There are job fairs and people are looking for people to go to work. We are happy on this side that people will be going to work and we’re building the Watson Lake Department of Environment district office.

Mr. Silver:   I’m glad people are at work, but this government has a bad habit and it’s costing the taxpayers a lot of money to support that habit. We see it time and time again — contracts going overbudget. In this case, it’s 50-percent over, yet the government is going to go ahead anyway. The new Watson Lake Environment office joins a long list of projects that this Yukon Party government — where money just seems to be no object at all. The Watson Lake Hospital, the hospital in Dawson, F.H. Collins will all come in millions of dollars overbudget and millions of dollars more than the government promised that they would.

What changes does the minister plan to make to the management of capital projects to stop the waste of taxpayers’ money?

Hon. Mr. Istchenko:           I thank the member opposite for the question. I’m glad that the member opposite is glad that people are going to work because we sure are on this side. The majority of the projects that the Department of Highways and Public Works manages — there are a lot of projects that come in on time and on budget. When you look at rural Yukon and some of the challenges that we had with the Beaver Creek Fire Hall, we had to go to retender for that with some of the bids that came in. We’re confident that this project is going to be finished on time and we’re looking forward to getting out there and getting to work this spring. There are a lot of opportunities for Yukoners to go to work and we look forward to them going to work.