Montreal P3 Bridge Builders In Talks with Government Over Schedule Miss
The contractor consortium led by SNC-Lavalin Group that is building the $3.1-billion Champlain Bridge in Montreal is in talks with federal officials in a bid to ease steep contract penalties triggered by the team’s recent announcement that it won’t meet the project’s long-awaited Dec. 21 deadline.
Signature on the St. Lawrence (SSL) announced Oct. 25 that it now is pushing to deliver the project no later than next June.
Federal Infrastructure Minister François-Philippe Champagne confirmed the delay, pointing to freezing conditions that have halted final paving work. The bridge's main structure will be complete in December, he said.
Under its contract with the government, SSL will face penalties of more than $76,000 per day over the last week of December, rising to more than $300,000 a day after that. If project completion takes until June, or another six months, the consortium could face more than $52 million in penalties, with fines ultimately capped at over $114 million if the delay were to drag on longer.
SNC-Lavalin is a 50% partner in the consortium, which also includes ACS, Hochtief, Flatiron, Dragados, MMM Group, TY Lin International and International Bridge Technologies Canada, according to a National Bank report on the project.
Infrastructure Canada is now “conducting an in-depth analysis of the contractual consequences related to the delay,” wrote spokesperson Lama Khodr, in an email. “However, confidential commercial discussions between the government and SSL are ongoing,”
An SSL spokeswoman said by email that "since the start of the project, we have always maintained that the construction of the new Champlain Bridge was complex and that our greatest challenge was the schedule."
She contends that "in recent months, unforeseen events beyond our control have occurred, which have resulted in delays that have not yet been recovered," adding that SSL "will provide more information" when it completes the government talks.
The spokeswoman notes efforts to "have the new Champlain Bridge open to traffic as soon as possible in 2019."
SSL may have a strong case to make that events outside its control led to the delay, which comes despite an intense push by the consortium over the last several months to meet the project’s deadline, notes Maxim Sytchev, construction industry analyst at National Bank Financial.
Among other things, work on the project was delayed in June by a one-week strike by construction crane operators across Quebec.
That delay followed a three-month delay over the course of 2015 and 2016 after federal regulators imposed strict load limits on use of the old Champlain bridge for materials transport, complicating construction.
SSL has filed a $93-million lawsuit against the federal government, arguing that Infrastructure Canada did not provide critical information on the load restrictions until well into 2016.
“Given the delay coming from the crane operators strike, we doubt the consortium will be on the hook for the extra time,” Sytchev notes in an email.