Liberals and Tories at a difference on contractor backing out of Trans-Labrador Highway paving
Government has allowed Humber Valley Paving (HVP) to walk away from its contract to pave a section of the Trans-Labrador Highway.
HVP was contracted by the government to complete 80 kilometres of the highway from Churchill Falls to Happy Valley-Goose Bay for $19 million. Only 20 kilometres was completed and HVP did not want to continue due to money lost due to forest fires in Labrador West.
The company has been paid 60 per cent of the initial contract by the government.
Cartwright-L’Anse-au-Clair MHA Lisa Dempster and Minister of Transportation and Works Nick McGrath disagree on how the situation should have been handled.
Dempster says there was an agreement to give HVP a $9.5 million dollar bond unless the work was not completed, in which case the government would hold onto it. Despite this, HVP was given the bond even though the company defaulted on the contract.
She has previously requested to government that six million dollars go into infrastructure in her district and feels the bond should have gone towards matters such as fixing the pavement in the Labrador Straits.
“It’s just another example of poor fiscal mismanagement,” she says. “And our message needs to be back to them that the public purse is not a bottomless pit.”
Dempster is also concerned at how long re-tendering will delay the completion of the highway.
However, according to McGrath, the 9.5 million that she is saying could go towards paving in the Labrador Straits simply does not exist.
“With a bond, there’s no money,” he explains. “It’s like when you buy insurance on a car. If you don’t have an accident in your vehicle, then your insurance company doesn’t give you back your money and a bond works the same way.
“There was an agreement between the contractor and government that we would expire the contract so there was no money changed hands whatsoever.”
He says that Dempster “has absolutely no idea what she’s talking about.”
According to Dempster, government also paid HVP 60 per cent of the contract for only a quarter of the work. However, McGrath argues that 60 per cent was indeed completed as other work, involving the road being built up, class A and class B spread, and guide rail posts, was completed. He says the only work that was left to complete was the actual paving of the remaining 60 kilometres.
“We’ve been very pleased with the quality of the work,” he says. “So we paid HVP for the work they did but they weren’t paid five cents for the work that wasn’t done.”
McGrath says that this was the best course of action as he saw an opportunity to put 145 kilometres of highway – HVPs unfinished 60 kilometres, 80 kilometres on phase three of the highway, and two small sections of five kilometres – together for one tender. He claims that by bundling all of this work together, the government has a good chance of getting a better price for the tender.
Government also terminated the contract for the 2.2 kilometres on Hamilton River Road – which is a part of the re-tender – in November and McGrath says the only thing different in this situation is the company contracted was owned by premier-designate and leader of the Progressive Conservative party Frank Coleman.
He accuses the Liberal Party of playing politics.
McGrath adds that if he held HVP to the contract, he would have put the company out of business, wouldn’t get the work finished, and would have put Newfoundlanders and Labradorians who work with the company out of jobs.
“We still have HVP as a company within the province, we’re going to get the job done on time, we’re going to get the job done on budget and we still have Newfoundlanders and Labradorians working,” he declares. “I think that’s responsible government.”
The Cartwright-L’Anse-au-Clair MHA disagrees, saying smaller businesses in her district, some of whom have contacted her saying they are owed money by HVP, do not have the luxury of having government bail them out when something goes wrong.
With neither side in agreement, it is evident that the Trans Labrador Highway will be a political topic for some time to come.