$29-million lawsuit filed against Utilities Kingston over cancelled sewage plant contract

A construction company hired by Utilities Kingston to expand a sewage treatment plant near Cataraqui Bay has filed a multi-million dollar lawsuit against the municipal company.

North America Construction, based out of Port Hope, claims Utilities Kingston owes it and its workers $29 million after its contract was cancelled in the summer.

Utilities Kingston is disputing the company’s claims.

According to Jim Keech, president and CEO of Utilities Kingston, the contract was cancelled in the summer after city officials saw “problems on-site” but did not specify what the problems were.

Details of the lawsuit emerged during 2021 budget discussions at city hall this week, and North Amercia Construction and Utilities Kington confirmed the case in interviews. Keech says the contract was cancelled in June 2020, while the claim was filed in September

He says the contract was written in such a way that allowed Utilities Kingston to break with North America Construction when it did.

After the contract was cancelled, Keech says the company made several claims that Utilities Kingston had delayed construction, causing the company to lose out on money.

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“In legal terms, it’s called a delay claim,” Keech said, “and it could be from things such as not responding to requests for information quick enough or not approving extras quick enough.”

Keech notes there were also extra costs the contractor was asking the city to pay for — claims Keech says Utilities Kingston also refused.

“It’s money that the contractor feels owing to them that we do not believe they’re entitled to this,” he says.

Scott McPherson, the president of North America Construction, told Global News in an email he believes Utilities Kingston cancelled the contract for “convenience.”

“North America Construction filed a claim to protect the interests of our suppliers, subcontractors and our company to ensure all parties are paid for work completed,” he said.

McPherson adds that negotiations toward settlement have started.

“We are optimistic for an expedient resolution.”

The city has now assumed the role of contractor, and according to Keech, the sewage treatment plant is now on pace to be finished near the end of this year.