June 2, 2008

Metro Vancouver plans to sue Bilfinger Berger over delayed filtration project

RICHARD GILBERT

staff writer

Construction costs could double for part of a drinking-water development in North Vancouver after the original contractor was kicked off the project.

Metro Vancouver recently terminated the contract with Bilfinger Berger Canada Inc., a Germany-based contractor. the company was supposed to construct two tunnels for the Seymour-Capilano filtration project.

Metro Vancouver, which operates the Greater Vancouver Water District, hired the company in 2004 to construct 7.1 kilometre twin tunnels for the project, but only about half the work has been done after the company cited safety concerns.

“Bilfinger Berger’s refusal to move forward with their part of this important project is a great frustration,” said Johnny Carline, Metro Vancouver chief administrative officer. “The contractor has provided us with no practical alternative in terms of completing the work.”

Berger won the contract after submitting a $100 million bid, which was almost half the amount of the next lowest bid.

The regional authority is currently in discussions with two of the other bidders to complete the project.

A spokesman said that Metro Vancouver also plans to sue Bilfinger Berger for any additional costs incurred under a new contractor.

“We terminated their (Bilfinger Berger’s) right to proceed with further work,” said Bill Morrell, Metro Vancouver spokesperson.

“By terminating their right to proceed further work, we reserve our right to claim any additional costs. It allows us to pursue additional costs against the bid or contract price.”

Work on the project was suspended by the company in January 2008 due to concerns about the safety of underground workers because of hazardous rock conditions.

“This rock behaviour and these conditions were not previously identified by Metro Vancouver and its engineer,” stated a press release from the lawyer representing Bilfinger Berger.

The contractor was paid $50 million for performing just more than half the job. The two tunnel boring machines are underground at the 4.1 km and 3.8 km points of their respective tunnels.

Metro Vancouver and their consultant engineer made recommendations to Bilfinger Berger for solving the safety problems related to weak and overstressed rock, which is fracturing and breaking out.

According to Doug Neden, project manager in the engineering division of Metro Vancouver, the contractor rejected one plan from Metro Vancouver engineers to deal with the problem and the contractor was reviewing a second plan in early April.

“Metro Vancouver consultants developed a comprehensive plan that was reviewed by world experts in tunneling and rock mechanics. The report produced by the experts said this was a safe and viable means of completing the work,” Morrell said.

“Bilfinger Berger has not agreed with the plan and has not provided a schedule for resuming work, which led to the action by Metro Vancouver.”

However, the contractor disputes this assertion.

“...(We) do not agree that a sufficiently safe and viable new design has been prepared,” stated the company press release.

It also takes issue with the termination of the contact.

“Bilfinger Berger has advised Metro Vancouver that it believes that the purported termination was wrongful and unlawful,” the company said.

The termination has lead to talks with the other bidders.

“We have already had a few informal discussions with the unsuccessful bidders on the original tender, Peter Kiewit Sons and Frontier-Kemper Constructors. What we are trying to accomplish with these discussions is to put a new contract in place,” he said.

Morrell said the next lowest bid for the tunnel construction was submitted by Frontier-Kemper Constructors.

“We anticipate it will take about the cost of the second lowest bid, which was $186 million, to complete the project,” said Morrell.

However, this bid was submitted four years ago and Morrell admitted the possibility that the tunnel construction could easily reach double the original $100 million estimate.

“There is a lot of equipment down there, but no tunnel boring is going on,” said Morrel.

“Again, because of the approach we have taken with the contractor and their right to proceed with further work, we have taken possession of all that equipment.”

The twin tunnels are an integral part of the $600 million Seymour-Capilano water filtration project, which aims to improve the quality of drinking water in the Greater Vancouver Regional District. The project includes the construction of the Seymour-Capilano filtration plant, the Capilano pumping Station and twin tunnels.

The tunnels will transport water from the Capilano reservoir to the new Seymour Filtration Plant. The treated water will then return to the reservoir, through a parallel tunnel for distribution.

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