Unfinished North Shore wastewater project facing 'extremely challenging market conditions'

The North Shore Wastewater Treatment Plant site is seen in this file photo from October 2021. (CTV)

Nearly two years after it cancelled its contract with the company it had hired to build a new wastewater treatment plant on the North Shore, Metro Vancouver is forming a task force to review its options for completing the unfinished project.

"This project has experienced extraordinary circumstances that have come at an unfortunate time of extreme market volatility for Canada," said Delta Mayor George V. Harvie, who is also the chair of Metro Vancouver's Board of Directors.

"This is a federally mandated project to increase the quality of wastewater treatment, which is critical to ensuring the health and safety of people and the environment, and protecting the waters of Burrard Inlet. I am striking a task force to review options for delivering this key project while mitigating its potential cost impacts on the region."

Those cost impacts are sure to be significant.

Originally scheduled to be completed by December 2020 at a cost of $500 million, the North Vancouver project had ballooned to more than $1 billion by October 2021, when Metro Vancouver terminated its contract with Acciona Wastewater Solutions Ltd. 

According to Metro Vancouver, the project contract was revised in 2019 to give Acciona an extra two-and-a-half years because of challenges that included difficult ground conditions, space requirements, and geotechnical complications. 

At the time that it cancelled the contract, Metro Vancouver said only 36 per cent of the work had been completed, when Acciona's timeline called for the project to be 55 per cent finished.

The regional district told CTV News at the time that it considered the contractor to have "abandoned" the project.

For its part, Acciona decried Metro Vancouver's decision to cancel the contract as "regrettable" and "unnecessary," claiming it had completed $100 million worth of work for which it had not been paid at the time of the cancellation. 

In March 2022, Acciona filed a lawsuit alleging that Metro Vancouver – formally the Greater Vancouver Sewerage and Drainage District – "repeatedly and wrongfully conducted itself" during the project's design phase "in a manner that subverted the achievement of the commercial purposes." 

That lawsuit is still before the courts. Online court records indicate that the most recent activity on the file came in May of this year, when Master Terry C. Vos of the B.C. Supreme Court issued a judgment on a procedural issue. In that decision, the master described the litigation as being "at an early stage." 

Metro Vancouver announced the hiring of a new contractor in March 2022. 

In its statement Friday, the regional district said it has "worked diligently to find solutions for design and construction deficiencies from the previous contractor" since terminating the Acciona contract.

"As we work to define a path forward to complete this project and address deficiencies left by the previous contractor, we are unfortunately beholden to the same extremely challenging market conditions that are significantly impacting infrastructure projects throughout British Columbia and across the country," said Jerry Dobrovolny, commissioner and chief administrative officer of Metro Vancouver, in Friday's statement.

The provincial government recently blamed such market conditions for the $1-billion increase in the cost of the new Surrey hospital that broke ground earlier this month. 

Metro Vancouver did not provide an updated cost estimate for the wastewater treatment plant project when announcing the task force Friday.

"Over the coming months, the task force will present the Metro Vancouver board with options for careful consideration," the statement concluded.

"Meanwhile, Metro Vancouver continues to work with PCL (the construction manager) and AECOM (the design consultant) to advance the project."