Three rivers still vex Mackenzie Valley fibre line installers

Three challenging river crossings near Fort Good Hope, N.W.T., stand in the way of contractor Ledcor completing the already-troubledMackenzie Valley Fibre Link.

On Tuesday, officials with the Department of Finance told regular MLAs that about 120 kilometres of the 1,154-kilometre line to Inuvik still need to be built.

The $82-million fibre line was supposed to be fully "in service" by Aug.31, 2016, according to the project agreement signed by the territorial government and Ledcor.

But after several subcontractors left the project citing logistical challenges, harsh working conditions and disorganization within Ledcor the government revised that timeline, saying it hoped to cut the ribbon on the project by June 2017.

• 2 more companies leave 'unprofessional' Mackenzie Valley fibre optic line project

Officials now say that remainsthe hopebut arealso citing a drop-dead deadline of August 2017.

"If Ledcor is not able to have the fibre in place and operating according to specby that date, then they are technically in default," said Sandy Kalgutkar, deputy secretary to N.W.T.'s Financial Management Board.

Kalgutkar told the Standing Committee on Priorities and Planning that Ledcor has had difficulties drilling under Rabbitskin River near Fort Good Hope. The river had been flagged as a problem area by Ledcorearly during the installation.

"They took four or five attempts at it and were not able to get the fibre through the riverbed," he said. "They are working with some fairly internationally known horizontal drilling expects to ensure they have an executable plan for the 2017 season."

The two other challenging river crossings are the Loone and Tieda, both north of the RabbitskinRiver.

New contractor could be called in

Kalgutkar said if Ledcor fails to meet the August2017 deadline, the territorial government could call in money that would have goneto Ledcor, and use that moneyto hire a different contractor to finish the job.

Under the project agreement, Ledcor and its partner Northwestel, which will operate the line, willeventually be paid through a series of annual payments totaling $234 million over 20 years, but only once construction concludes and only if the line is working to the satisfaction of the government.

The government has alreadywithheld an initial $10-million payment fromthe companies because they didn't meet the original August 2016 "in service" deadline.

Officials saidLedcor and Northwestel are currently paying over $200,000 a month to their lenders underscoringthe financial pressure the companies are under to finish the line.

Julie Green, MLA for Yellowknife Centre, questioned Kalgutkar on the risks still facing the project.

"There do seem to be a number of risks at this point tocompletingthe project onbudget and on time," she said.

"Their room for margin of error has gone way down."

Green wantsthe territorial government to rethink how it oversees public-private partnerships.

"P3s need their own oversight, and that oversight is really beyond the ability of regular MLAs to provide out of their own knowledge," she said.

"What I would like to see is third party oversight where we get an outside of government opinion about how well the P3 is working. I think that would allay some of our concerns of this project and others."