BC Hydro has serious concerns about the schedule and budget of the Site C project and is classifying the health of the mega-dam construction as “red.”
In a letter to the B.C. Utilities Commissioner, CEO Chris O’Riley says delays related to the COVID-19 pandemic will continue to present cost pressures.
“As the evolution of the pandemic is uncertain and the date of resolution is unknown, various cost and schedule impact scenarios continue to be assessed and refined as part of the re-baselining process,” O’Riley writes.
“We classified the overall health of the project in both reports as ‘red,’ or having serious concerns, specifically regarding schedule, scope, and budget.”
The project has been controversial and a political hot potato. Construction started in 2015, and when the NDP came into power two years later, it conducted a full review that resulted in Premier John Horgan announcing that the controversial project was past the point of no-return and the province would continue with it.
At that time, the projected cost of construction was $10.7 billion.
Hydro has acknowledged the new cost will be substantially higher. Cost pressures are stemming from work being scaled back at the dam site, uncertainties to the first power and the project in-service date, and the need to implement foundation enhancements to structures on the right bank of the Peace River.
“As the evolution of the COVID-19 pandemic is uncertain and the date of resolution is unknown, the cost impact cannot be accurately calculated at this time,” reads the report, based on further engineering analysis by BC Hydro.
“Mitigation measures, the foundation enhancement costs are expected to be more substantial than initially expected in January.”
The utility confirmed modified work being done on the project on March 18. On the dam site, crews prioritized work required to achieve river diversion in fall 2020.
“In the quarter January to March 2020, the COVID-19 pandemic has had a material impact on safety, cost, and schedule for the project. While diversion milestones have been impacted, proceeding with river diversion in 2020 remains on track,” the letter reads.
“There is uncertainty with the project’s schedule and in-service date. This is primarily due to our ability to re-start and accelerate work that was halted due to the pandemic.”
Energy Minister Bruce Ralston says he is concerned about the reports. He has hired Peter Milburn, a former deputy minister, as a special advisor to work with BC Hydro and the Project Assurance Board.
“The previous government chose to start Site C in 2010 and made clear they wanted to push it past the point of no return. And they did,” Ralston said.
“We knew there were significant cost pressures and risks with Site C when we formed government. COVID-19 has dramatically added to these challenges.”
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