“Scope changes” to South Fraser Perimeter Road fuels rumours that the project is dead – and the Liberals are out of money.

What?? You don’t say??  Are the Liberals once againover budget, and underfunded – before a project even starts? NOoooo…. say it ain’t so!!!!

A little birdie flew by my window tonight, and whispered some sweet nothings in my ear… oh so sweet… regarding that often protested and over-hyped South Fraser Perimeter Road( part of the Gateway project) we all love to hate.  I swear, I nearly had a braingasm when I heard this.

Apparently, there have been several small configuration changes already to the plans, and rumour has it that even now, after the bids have been in for several weeks, the Liberals( Ministry of Transportation)  are considering some ” scope changes ” . Which could mean there are “cash flow problems” that require a significant reduction in the magnitude of the project…..

Hmmm. Have the Liberals gone and distributed the pie before it was actually made and baked again?  Because there was already a change to the structure of construction payments done, to reduce the need to raise financing to do the project…. 

Now. Between you, and I, (and all the Public Affairs Bureau employees who are no doubt in “code red” mode right now), this information set my bullsh*t detector off like you wouldn’t believe, partly because of the way the MOT rammed the Port Mann Bride through even after the winning bidder lost their financing.  It would seem to me that the Liberals have a public procurement policy in place that seems to be rigid and besieged with rules, yet those same rules are able to be altered at a moments notice. Again- see that Port Mann link just above.

Again, as with most major transportation projects in BC, the shortlist of proponents is a who’s who of favorite BC Liberal bidders, and nary a truly Canadian company among the various consortiums.  See what I mean:

Fraser Transportation Group – includes Iridium Concesiones de Infraestructuras, S.A. of Spain and Zachry American Infrastructure of Texas as equity partners and Dragados S.A. as the lead design build contractor.   

 South River Connector – includes Babcock & Brown Public Partnerships Limited Partnership and Bilfinger Berger Project Investments Inc. as equity partners, with Peter Kiewit Sons Co. and PCL Consultants Westcoast Inc. as the design build contractors.

 The Riverway Partnership – includes the Spanish firm of Cintra Concesiones de Infraestructuras de Transporte, S.A. and the Canadian firm of SNC-Lavalin Inc. as equity partners, with Ferrovial Agromàn, S.A. of Spain and locally based SNC-Lavalin Constructors (Pacific) Inc. as design build contractors.

With the exception of SNC-Lavelin, it seems that as usual,BC money is flowing out of the province. Nothing new there. And of course, all the same names, in all the same places. SNC is not without some .. creative employees, if you recall.

But, here is the thing about all of this. It stinks. It doesn’t make sense! What if the BC liberals have hedged a bet on what they thought was a sure thing… but got it all horribly wrong ?

Charlie Smith, of the Georgia Straight, seems to be thinking the same thing. Here is an excerpt of an article I just found that will surely make you go ” Hmmmmm…”

The B.C. Liberal government has tried to position our province to be the beneficiary of growing transoceanic trade.

Part of this strategy is the Gateway Program, which is an unprecedented, multibillion-dollar road-building exercise that includes a new Port Mann Bridge, a widening of Highway 1, and a South Fraser Perimeter Road.

Agricultural land is being sacrificed for pavement and to create space for containers coming from China.

Metro Vancouver has previously reported the Ministry of Transportation and Infrastructure secured approximately 110 hectares of agricultural land for the South Fraser Perimeter Road and the Golden Ears Bridge projects.

According to the theory of comparative advantage, we can rely on people in other parts of the world to grow our food because they’re better at this than we are. We’ll just trade for more of it as we need it.


This weekend, China reported its first trade deficit in six years. According to Xinhua News Agency, the country posted a $7.24 billion trade deficit in March. This will come as no surprise to anyone who read Rubin’s 2009 book, Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization (Random House Canada).

China still has a trade surplus through the first three months of the year. And overall trade still grew, which will be cited by those who don’t see any economic transformation occurring as a result of diminishing oil supplies and climate change.

Here at home, Statistics Canada reported last month that the pace of Canadian exports slowed in January. Exports to the U.S. declined 0.6 percent and imports fell by 0.5 percent.

Exports to countries other than the U.S. rose 3.8 percent, whereas imports from countries other than the United States decreased 3.9 percent, led by a fall from the European Union.

For the past 25 years, the corporate sector in Canada has promoted trade as some sort of economic panacea. You’ll sometimes hear economists say that countries that trade don’t go to war.

But all might not be as well as it seems, particularly if oil prices continue rising. The current price of US $85 per barrel is relatively high on an inflation-adjusted basis.

As this chart indicates, oil prices have only surpassed this level on an inflation-adjusted basis three times before: 1980, 1981, and 2008.

The inflationary period in the early 1980s triggered the worst economic slowdown since the Second World War.

Everyone knows what happened to the world economy in 2008. International trade plummeted as a result.

It could happen again.

I’m beginning to wonder if the B.C. Liberal government and its cheerleaders in the media are looking in the rear-view mirror–and not to the future–when they promote policies like the HST that blindly assume that more international trade is inevitable.

Ahhh… I love Charlie, I really do. This is a great piece, once that should be read far and wide with the rest of this blog. Of course, I have a soft spot for Charlie since  he did this wonderful bit that contains THE video Gordon Campbell would rather you not see.

Clearly, something is amiss in Lotusland this evening, and I’m not talking about the Canucks loss in OT. This HST petition is about so much more than the HST. It is about everything this man has done to BC in his alleged Golden Decade ( of delusion) and British Columbians have focussed all of that anger, on the HST

You all need to be asking some questions tonight. When we live in a supposedly free country, why is everything such a damn secret?  Have the Liberals put themselves in a position of possible litigation again if they do not proceed with this project? Are they relying on this supposedly ” revenue neutral” tax to pay for overpriced projects deemed necessary far before the current world economic conditions existed?

It may be speculation at this point, but I have learned where there is smoke, there is usually fire. I suspect this latest news is the spark for something far bigger.

 Time for Campbell to go.

**** Update to this post HERE – Sunday May 9th/2010 : https://lailayuile.wordpress.com/2010/05/09/fraser-transportation-group-chosen-as-preferred-bidder-for-south-fraser-perimeter-road/

17 thoughts on ““Scope changes” to South Fraser Perimeter Road fuels rumours that the project is dead – and the Liberals are out of money.

  1. Cancel the multi-billion boondoggling, South Fraser Perimeter Road to nowhere and voila, funding is available to reverse all the cuts in the march budget. It could be that easy.

    Campbell & Co. may have bailed out one freeway P3 (Port Mann), but they are going to have a hell of a time doing the same thing twice. Don’t be surprised if the price tag on this thing eventually climbs well past the Port Mann deal.


  2. i’ve heard some bar chatter in the business district downtown to this effect, Laila. My understanding is that they are seriously considering pulling the plug on it completely.

    The links in your article are great. I was shocked to see the SNC link, I had no idea they were up that alley. I knew Kiewit was in that barrel at one time, makes me wonder how the heck they keep getting projects here…… nudge nudge, wink wink. Anyone see any plain brown envelopes around?? ; )

    A must read, people. A must read.


  3. This is interesting chatter. I heard a while back that the project was facing a scale down via removal of several interchanges etc. meaning less access points along the way.

    I also heard that SNC is the preferred bidder, because they did knew if they raised a fuss about Kiewit and friends getting the Port Mann deal, they would be blackballed on further large projects, much like Tercon was following the MOT lawsuit.

    Fairness in procurement in this province does not exist. Keep on this one Laila, see where it goes. I will see what I can find for you.


  4. Good post Laila….Having followed this story for sometime now…

    Professional highway builders raised serious concerns about the cost,stability of building said road through the bog, besides the environmental issues, sinking bog lands and heavy truck traffic don`t mix well….

    Stephen Rees has written extensively on this issue…And then there are those pesky declining trade numbers…

    Talk to ya later


  5. Thanks badfreeway, for this tip re: Earth day! Sounds fun. It will be interesting to see if anything comes out from the Libs in the next week or so to counter this chatter, or if they stay silent.

    Adam, thanks for the heads up. See what I mean? There has to be some substance to this, and if you – or anyone else ,for that matter- hears anything, give me a shout through the contact page. My direct email addy is on the Hire Me page. I thought the links were pertinent, and give another angle to the relationships between the MOT and the bidders.

    Anonymous, now that is an interesting bit of gossip. Not that I am one to entertain speculation and conjecture, but I do think there is something to all of this. I heard the same thing about SNC while working on the Tercon story. Yes, public procurement is not the unbiased, fair process that it should be, and should not be allowed to continue as it has for so long, if the government truly values BC based business.


  6. The “3P” can be translated into “pay political patronage” to the liberal party the party will kiss ass and give you what ever you want. Why have so many P3s gone down the toilet? Easy to answer not enough taxpayer input ($$$$$$) for the vultures to dine on. So Campbell and Company are lining their respective future fortune on the backs of BC taxpayers. And if the next government doesn’t repeat the liberal ripping up of contracts they aren’t worth the price of election.


  7. Re this bit from Charlie’s column:

    You’ll sometimes hear economists say that countries that trade don’t go to war.

    Economists are blithering idiots, then. They should be forced to read history before spouting off about what causes this or that. The British Empire, the Japanese Empire, the German Empire(s), the Spanish Empire etc……did trade keep Argentina from going to war over the Falklands, or keep Britain from responding? Did trade keep the US from going to war in Iraq (twice) and Afghanistan (forever)?

    Of course, there are far more economics and business students in universities nowadays, and history departments are chockfull of ideologues arguing over irrelevancies, so it’s not too surprising professional economists would say something so absurd; they only read their own ideas, no one else’s….and certainly not any actual history/facts….


  8. SkookuUno–

    I think that many non-economists that actually know what they are talking about would even go so far as to strongly suggest that the US went to war in Iraq (twice) precisely BECAUSE of trade.

    Otherwise, how else to explain the fact that Iraq II was originally bestowed with the following catch phrase Operation Iraqi Liberation……?


  9. Laila this is a great article that combines some interesting analysis with a fascinating summary of the facts, but you got one thing way wrong….your conclusion.

    “Time for Campbell to go”

    It is way past time. Right after he got the DUI would have been appropriate. Anyone who has the extremely bad judgement to drink and drive has no business leading a provincial government.

    But right on that the South Fraser Freeway and Gate way are expensive mistakes of projects that have no business being built including they are likely not even economically justifiable for the long term, given the world trade and financial situation, never mind that these projects are also way too highly priced in environmental terms.


  10. Thanks Bernadette, and badfreeway, whose link within the name must be clicked on by all!

    As I said, where there is smoke, there is fire.

    The Libs routinely monitor this site when I am actively blogging, and this post has had so much activity from within the government I think it has inadvertantly cost taxpayers money!!

    The MOT is on a couple times an hour. Every bidder has been on,numerous times ,as have sunbcontracters. Methinks this is a touchy spot for all? FOI on this anyone?


  11. I heard through someone already working on the prep, that the number of interchanges is going to be greatly reduced. That means less access for those using the road, as well as business alongside of it.

    What does this mean, if proved true, for those who bought up land like hungry hyenas when the project was announced? I would be pissed to find out there is suddenly far less on off spots.


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