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North Shore wastewater plant needs forensic audit of $2.8B cost overrun, say councillors

The extraordinary $2.8-billion cost overrun of the North Shore wastewater treatment plant project needs a thorough independent eye, says a group of municipal councillors.
The North Shore Wastewater Treatment Plant project has a long and troubled history. | Rob Kruyt / BIV

A group of seven municipal councillors in Metro Vancouver’s jurisdiction are calling on the Auditor General Office of British Columbia to crack open the books of the wastewater treatment plant project in North Vancouver that is now $2.8 billion over budget.

“Given the magnitude of the concerns surrounding this project, we respectfully urge your office to conduct a thorough audit or investigation into the financial aspects of the wastewater treatment plant project,” the group states in its letter to auditor Michael Pickup.

One of the seven project critics is New Westminster city councillor Daniel Fontaine, who told Glacier Media in an interview Thursday that he specifically supports a forensic audit.

“If you’re asking me personally, given the scope and scale of cost overruns — nearly $3 billion — there needs to be a forensic audit,” said Fontaine.

On March 22, Metro Vancouver Commissioner Jerry Dobrovolny publicly revised the project costs to $3.86 billion — a five-fold increase of the $780-million estimate in 2017 when the building contract was awarded to Acciona. The last publicized cost estimate was $1.1 billion when Metro Vancouver filed a lawsuit against Acciona and a secret committee was struck by the board.

To balance next year’s budget, the board approved a plan on May 31 that North Shore residential property tax bills go up by $590 a year for the next 30 years (that's on top of an average of $484 of current sewage costs) while all other Metro households will rise by between $80 and $150 annually.

But little is known as to why the bill has risen so much. Dobrovolny has broadly cited construction cost inflation and delays from the COVID-19 pandemic.

“The situation requires an investigation as to what is going on and what is the driving pressure; why are these mega projects going so terribly off track,” said Fontaine, adding, “I don’t have the answers.”

The auditor, said Fontaine, is an independent body that has the authority to attempt to find those answers.

Fontaine said a forensic audit — which could prove costly in itself — is appropriate given the scope of the cost overrun; it may also provide answers for other infrastructure cost overruns in the region.

Fontaine likened such an inquiry to other consumer matters.

“Why wouldn’t we extend our curiosity regarding the price of cell phones and bread to other areas of the economy when we see patterns of hyper inflation and behaviour that demands answers?” asked Fontaine.

“You have one of two options: bury your head in the sand …Or go deeper and find out what’s driving these costs and find out who’s profiting from this,” said Fontaine.

The letter claims Metro Vancouver has lacked transparency and accountability with the project.

“A special task force was appointed by Metro Vancouver Chair George Harvie to review this project. It was provided with information regarding what triggered the cost overruns, however, due to a confidentiality agreement, they are not allowed to speak to the media or the public,” the group states in its letter.

The eight councillors made clear they are speaking as individual elected officials. They are: Coun. Linda Annis, City of Surrey; Coun. Mike Bose, City of Surrey; Coun. Daniel Fontaine, City of New Westminster; Coun. Kash Heed, City of Richmond; Coun. Richard Lee, City of Burnaby; Coun. Paul Minhas, City of New Westminster; Coun. Ahmed Yousef, City of Maple Ridge.

“There hasn’t been a single resignation or firing because of this failed project, the only thing we have heard from Metro is how much every taxpayer will have to pay over the next three decades. That’s just not good enough,” said Lee.

Heed raised the point that Metro Vancouver is embarking on a $12-billion wastewater plant in Richmond, to serve Vancouver.

Calls to audit the project come a week after calls to have the board of Metro Vancouver be directly elected as opposed to appointed by elected officials from respective municipalities.

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Editor's note: This article was updated to reflect seven, not eight, signatories.