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/)