Port Mann Bridge becomes the new ‘Fast Ferries’ debacle.

Posted on by Laila

If you don’t follow Integrity BC on twitter https://twitter.com/INTEGRITYBC , or at their facebook page where frequent updates are posted, you are missing out on some vital information regarding BC politics and how the BC government operates.

All of the work posted is rock solid and supported with research. Todays post is exceptional and is extremely relevant to much of the work I’ve done here over the years on the provinces major transportation projects,including the Port Mann Bridge.Particularly so since after looking through those projects, I’ve called several times for a Charbonneau Commission style inquiry into the BC governments bidding and procurement practices. These mega projects are where its so easy for things to go south, financially speaking.

What you are about to read, is very important. And there is a clear indication in this post,that there is more to come.

Integrity BC was kind to give me permission to share this information with all of you here. Enjoy.

So, what does the Fast Ferries and the Port Mann Bridge have in common?

First, you need to go all the way back to January 12, 2000 and a session of the Select Standing Committee on Public Accounts. Back then the BC Liberal party was the Official Opposition. One name you’ll recognize from that session is Mike de Jong.

Another person who came up that day was Frank Blasetti. At the time, Frank was with the Crown Corporations Secretariat (CCS). He co-authored the submission to the BC Ferries board “with respect to the ten-year capital plan,” which included the fast ferries project. He was also the sole-presenter of that submission to the BC Ferries board.

Morris Sydor (Office of the Auditor General): “…we have to keep in mind that it contained a $152 million error in terms of the size of the capital plan. Now, if it was a collaborative effort, how could we have come up with such an error? The reason we came up with that error is because information was being passed to CCS, who were completing the plan and didn’t have the necessary knowledge to understand that that error was brought in there.” (Hansard)

Fast forward to 2008 and the incorporation of the Transportation Investment Corporation (TIC), which is responsible for the Port Mann Bridge/Highway 1 Improvement Project.

Who did the BC government – now under Liberal hands – appoint as President and CEO of TIC? Frank Blasetti.

Something else the fast ferries and bridge have in common? Cost overruns.

TIC signed a fixed-price contract of $2.398 billion with Kiewit/Flatiron. So far they’ve paid out $2.821 billion. They’ve exceeded the maximum annual payment in all but one year of the contract to date.

The difference alone is almost what the fast ferries cost in total.

And that doesn’t include other cost overruns and losses on interest rate derivative swaps (estimated to be as high as $250 million in additional interest charges).

The Port Mann project had originally been forecast to cost $1.5 billion, it came in at $3.3 billion.

As was once said: “the definition of insanity is doing something over and over again and expecting a different result.”

The government will say its “procurement policies are structured to be fair, open and transparent” and that “contracts are awarded through a transparent, market-driven, competitive process to ensure the best value for our customers.”

Yet, Blasetti refused to tell the Greater Vancouver Regional District board about increased financing costs on the RAV Line, calling it “proprietary.” BC Hydro has refused to release the bids of the unsuccessful proponents on the main Site C civil contract. Partnerships BC routinely refuses to release information and heavily redacts what it does post. There’s also a key financial document that seems to be missing from TIC’s website.

Here’s what Principle 10 of the OECD’s Principles for Integrity in Public Procurement says:

“Empower civil society organisations, media and the wider public to scrutinise public procurement. Governments should disclose public information on the key terms of major contracts to civil society organisations, media and the wider public.

The reports of oversight institutions should also be made widely available to enhance public scrutiny. To complement these traditional accountability mechanisms, governments should consider involving representatives from civil society organizations and the wider public in monitoring high-value or complex procurements that entail significant risks of mismanagement and corruption.”

Again from the OECD: “How do transparency programs help fight corruption?

Transparency is a main instrument to fight corruption, since it allows civil society to have a complete access of most of government’s decision-making proceedings and their grounds.

When private entities interact significantly with public bodies, transparency is in addition a tool for deterring private incitations for corruption. Since a number of public decisions affect collective or public goods or general interests, transparency is a guarantee of their protection.”

While this post may seem to be about Blasetti, it’s not.

It’s about procurement policies, loyalties and friendships. When it comes to public infrastructure in the province, it’s a small world. Too small. As you’ll learn more about in the coming month.

 

Keep an eye out for our Hail Hail The Gang’s All Here post.

 

Hmmm….. something wicked this way comes I think. I suggest that you head over to their facebook page to read the other very important links posted in the comments below this post over there.

Which means it might be a good idea for you all to go back and refresh your memory on the many lesser known details of some of these projects I’ve written about.

Like the shadow tolls we all pay on the Sea to Sky, still largely not known to the general public. ( scroll down to series 3/4 down the page at the embedded link)

How some of the retaining walls on that highway were built with materials not approve by the Ministry of Transportation.

Like the fallacy of a fixed price contract.

Or how government altered bid documents in the Tercon vs British Columbia case, a story I broke and one of the most egregious examples of bidding irregularities that led to changes in contract law. ( last series at this link https://lailayuile.com/best-of/)

 

 

 

 

 

21 thoughts on “Port Mann Bridge becomes the new ‘Fast Ferries’ debacle.”

  2. this will continue to cost the taxpayers more and more. People aren’t going to use the Port Mann because it simply costs to much.

    all these contracts the B.C. Lieberals hand out do nothing but put B.C. further in debt. I’m waiting for us to declare bankruptcy, because it will come, especially if B.C. has a fire like the one in Alberta.

    Loved the line, “Falcon’s Folly”, how very appropriate!

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    2. e.a.f.
      “I’m waiting for us to declare bankruptcy, because it will come, especially if B.C. has a fire like the one in Alberta.”
      Or an earth quake or another term of Liberal Governot.

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  3. And, whatever the official line is, whatever the published statements, whatever the sentiments expressed by politicians, the opposite is true. The all encompassing BIG LIE all the time.

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  4. Every year the Govt keeps adding to our massive provincial debt load. The way they manage debt is by growing the GDP, since they measure debt as a ratio of debt/GDP.

    The provincial debt grows every year. As long as GDP grows every year, the ratio of debt to GDP remains the same, and they think it’s manageable.

    But nothing can grow every year for infinity. It’s basically a big ponzi scheme.

    The idea that we ‘need’ economic growth is a hoax.

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  5. What amazes me is the liberals continue to spread the completely false lie that the NDP are the fiscally irresponsible govt when the exact opposite is true and the voting public continue to lap it up…….

    On another note .
    I dont use Twitter.
    I will never use twitter because I see no point in commenting on everything I see, read, eat or drink for the entire planets entertainment…….I have no interest in twitter. period.
    Bob Mackins post of an erroneous twitter reply from someone in govt the other day was basically unreadable to people not on Twitter. Perhaps a summation of what was sent to him for the thousands of readers NOT on Twitter?
    Instead of peoples twitter comments of disbelief??????
    I went to his blog site to see if he actually commented on it.
    Nothing. Just his twiiter post commenting on his disbelief of “fumble fingers” in govt….?????
    Its like telling a joke to a room full of people and not sharing to a person that just walked in while all were still laughing.
    VERY annoying.

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        1. Fraser should resign for NO OTHER REASON than the fact that he is applying a blanket ban on all Makin’s questions. Totally unreasonable. A conflict of function, actually. And the longer he stays, the more Liberals that should resign for allowing it.

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    2. In complete agreement about Twitter, noncon.
      It’s insidious.
      Maybe it’s a generational thing.
      I spent half an hour trying to get to the meaning of this and just kept ending back where I started:
      Laila Yuile ‎@lailayuile
      That moment when someone who attended Clarks event in Comox calls with all the details of what she was telling everyone… lol #bcpoli
      Huh?
      I still don’t know “what she was telling everyone.”

      I’m not particularly interested in joining and trying to keep up with a social group that communicates in half sentences of a foreign language. Then having to go elsewhere to get more information.
      No wonder there is so much distraction around us.
      Just give me something I can read with a start, middle and end.

      I hope that is not the future of news.
      Frustrating.

      End of rant.

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  7. Yes, agreed Fraser should resign or be removed from his postion. But would the Premier that he is protecting ever do it?
    His comment in hi

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  8. Part 2. His comment in his email shows his disregard for any questions. His position should be open to assisting any and all manner of journalists and citizens in getting to the truth and exposing conflicts. The fact that he would like to ignore this obligation to one individual, and there are probably more shows he isn’t protecting the public but shielding a Premier.

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  9. I know this idea may be slightly off topic but I personally there is more syncronicity than most realise.

    Out of general curiosity I looked out the US petroleum consumption data. Consumption has dropped off these past few years much like electricity sales by BC Hydro. The puzzled producer group in the US is rummaging around for the reasons why, even going as far as to say that it could be demographics. No one seems to connect the dots between what the economists at CreditSwiss have been reporting for several years, that wealth concentration has and is happening at a fast pace and diminishing affordability for 99% of the global population. Folks might say; what has that to do with bridges and users. Well if a large and growing number of citizens are getting less wealthy they find it hard to afford as much gas consumption as before or as much use of toll bridges as they might like.

    Living in North America has a become more financially challenging each year so people are slowly learning to do with less.

    The big problem our governments sell access to those prepared to pay and those are the folks
    winning the wealth concentration game. Brooksly Borne dubbed this a “tape worm” economy , where the parasite is unable to stop until the host dies.

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    1. Another must read. Right Now. Sorry gentlemen I’ve been in the bush today. More later. BTW, twitter is critical to getting stories out, engaging new readers outside the regular pack and pressuring politicians. I know many are not interested because there is a lot of crap out there. But I build a regular and growing audience which is important when it comes to informing voters, and the analytic measures show impressions over 600,000 and a very high engagement rate. Which means people actually click on the tweet to read it and the links. Social media is a powerful forum to share work when you don’t have a publication behind you anymore.

      Also, you do not need to have a facebook account to read Integrity BC’s facebook page but to comment you would. So check it out. The comments he posts in the comment section are critical reads as well.

      “So, what does the Sea-to-Sky Highway Improvement Project have in common with Site C?

      First, you need to go back to 2005, when Partnerships BC reached an agreement with S2S Transportation Group for the Sea-to-Sky project. S2S was made up of six companies, including Peter Kiewit Sons and the Macquarie Group.

      At the time, Frank Margitan was the vice-president of Peter Kiewit Sons and is identified in legal documents as the “Project Manager” for Sea-to-Sky.

      In those same documents, Gary Webster is identified as the Province’s Representative, a position that can include approving invoices for payment. Webster was a senior vice-president at CH2M Hill.

      While these payments will not be exclusive to Sea-to-Sky – from 2005 to 2011 – CH2M Hill billed the BC government $95,081,983.

      Frank went on to retire, albeit he still does some consultancy work from time-to-time and Gary went on to KPMG.

      And there it might all have ended, except for one funny little coincidence.

      From an October 20, 2014 letter to BC Hydro: “As part of its due diligence process and to support its final investment decision, BC Hydro asked me to engage a panel of industry experts, to undertake an independent review of the direct cost estimate, and provide an opinion regarding its completeness, sufficiency and accuracy.”

      Who signed that letter? Frank Margitan.

      But you can never be too sure. Never hurts to get a second opinion on the independent panel’s review, the one headed-up by Frank. So off to KPMG.

      Here’s part of what KPMG wrote in its December 4, 2014 letter: “The expert panel of construction estimators that independently reviewed the major components of the estimate was again a level of diligence that increases the confidence of the estimate compared with other capital projects…The level of detail of this panel review was comprehensive and was performed by reviewing backup information and interviewing the estimating team.”

      High praise indeed. And who signed KPMG’s letter? Gary Webster. Small world, huh?

      While these payments will not be exclusive to the Site C project – from 2009 to 2015 – KPMG billed BC Hydro $11,569,692. KPMG is also BC Hydro’s independent auditor.

      Webster also noted in his letter that: “KPMG worked with Partnerships BC to ensure that the approach in assessing and valuing risks on the Site C project was consistent with the standard approach developed and implemented on other Government projects.”

      Those would be the projects that consistently come in over budget and behind schedule. Think Evergreen Line.

      Webster added: “Based on input from the project team and our experience with other projects adopting a management reserve of at least 5% of the direct costs would be a reasonable practice.”

      Sea-to-Sky went over its initial estimate by 29 per cent. We’ve included a table in the IntegrityBC thread comparing initial estimates against actual costs on 18 infrastructure projects.

      Oh, and who was on the board of directors of Partnerships BC at the time? Frank Blasetti of Fast Ferries and Port Mann Bridge fame. Really small world.”

      Indeed. A very very small world….and one thats looking like it needs an inquiry……

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      1. I’m not saying don’t tweet and I do understand the place for social media. Our Prime Minister mastered that system. I’m just saying and hoping it doesn’t become the ONLY way to be informed. I still like to read unabridged stuff. Like you produce here.

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  11. nah it won’t be. The corrupt corporate media in this province would never ever let something like that stick to Christy…if the NDP were in power, that would be another matter.

    Personally i think it is a fiasco myself as with so many other things but until people get their heads out of their butts nothing sticks to Teflon Christie…..Plus until the right splits again the NDP do not have a hope in hades to win…

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    1. One thing that the Port Mann Bridge does not have in common with the Fast Ferries is selling it to get the debacle out of the public eye would be very tricky – pretty much impossible.

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