Delays, cost overruns could sever building contract

EDMONTON A Calgary-based firm responsible for the $763-million Grande Prairie Regional Hospital project has defaulted on its schedule, says the province.

The government spelled out a 15-day deadline for Graham Construction and Engineering to submit a plan that will get the hospital project back on track. Otherwise the firm could be fired, said Infrastructure Minister Sandra Jansen.

“This is a serious step, it’s not something we do lightly,” she said in a teleconference Monday. “The bottom line simply is the hospital is not progressing as it should.”

The firm, working toward a completion date in early 2019, asked the province for $120 million extra, Jansen said. That’s on top of the $510-million contract that makes up the bulk of the project cost.

This is a serious step, it’s not something we do lightly. The bottom line simply is the hospital is not progressing as it should.

“We believe that Graham Construction has not fulfilled the obligations set out in the contract,” she said.

“We don’t believe they’ve provided sound reasons for their request.”

Graham Construction and Engineering didn’t respond to a request for comment on Monday.

The ministry of infrastructure wouldn’t release details on how much money has been transferred to the company so far, citing confidentiality concerns.

The original contract dates back to 2011 under the former Progressive Conservative government, with completion slated for 2015. The latest budget pegged the cost at $763 million — the price tag has increased over the last several years from $319 million.

The new hospital was first announced in 2007 by then-premier Ed Stelmach and has faced a series of hurdles, including construction deferrals and design changes.

In the latest construction update posted online, Alberta Health Services (AHS) said the building ’s shell work, including insulation, roofing and all of the windows, is complete.

Seventy per cent of construction inside the building is done, referring to wall-framing, drywalling, as well as work on mechanical, piping and electrical areas.

Work on a five-storey parkade as well as a pedway to connect the lot to the hospital is also underway, according to AHS.

“Our concern is this project will drag on,” Jansen said.

“We have been concerned for some time about the pace of construction.”

The United Conservative Party previously raised the issue with the government, said caucus spokesperson Annie Dormuth.

“Provisions exist in contracts for events where a contractor is not meeting agreed upon terms,” she said in a written statement. “It’s unfortunate that it has come to this, but these provisions exist for a reason.”

The hospital has been billed as a state-of-the-art regional referral centre for northwestern Alberta residents.

Design plans include eight operating rooms as well as obstetrics, cancer care, critical care and emergency services.