Contractors want court to review highway deals with B.C. company

EDMONTON Five Alberta companies will square off against the province in court over the sale of highway maintenance contracts worth more than $480 million to a B.C. firm.

The contractors want a judicial review of the province’s role in the sale of Carillion Canada’s operations in Alberta and Ontario to Emcon Services Inc. Carillion was responsible for about 43 per cent of Alberta highway maintenance.

“The Alberta government really just didn’t stand up for the Alberta companies in any way in this process,” said Laurie Stretch, spokesperson for the five companies, on Wednesday.

The companies argue the government overstepped its own procurement policies by entering into undisclosed discussions with a third party to extend contracts and grant concessions.

“Despite having long-standing contractual relationships and a legitimate expectation of fairness and transparency, the applicants were not afforded the same consideration as Emcon and were deprived of the opportunity to bid on the contracts in the normal course,” states the court application filed on July 23.

Alberta Transportation Minister Brian Mason said the deal, approved by an Ontario court, ensured highway maintenance contracts weren’t interrupted.

“Our legal counsel says that we have done our due diligence here … we are confident this has been done properly and above board,” said Mason’s spokesperson John Archer Wednesday.

Emcon acquired three Alberta Carillion contracts set to expire on various dates before 2023 at a combined cost of $482 million. That included an annual price tag of $120.5 million, as well as the two-year extension of one of the contracts slated to end in 2019.

Under Carillion, the three contracts cost $115 million per year.

“It’s fundamentally unfair to grant concessions to one new player in the province that you’re not granting to all of the existing players … that’s the real sticking point for the (contractors),” Stretch said.

But Archer said Emcon’s bid was the only one on the table.

“In order to bid for Carillion’s assets, you have to bid for Ontario and Alberta,” he said. “We could not re-tender the Alberta contracts.”

Stretch said while that’s technically true, it’s not the full story.

“The rules of the auction were set up in such a way that no one of the Alberta highway maintenance contractors could bid,” she said.

“The only way to ensure that taxpayers are getting the fairest price is to require some competition on that price.”

In March, the NDP provided $8.9 million to the troubled Carillion for highway maintenance until the end of April. The government propup followed a January announcement that United Kingdom-based parent company Carillion PLC had gone into compulsory liquidation due to crushing debt.

“So far, this entire process has lacked transparency and accountability,” said United Conservative Party transportation critic Wayne Drysdale, adding the terms of the deal should be made public. “We share many of the concerns articulated today by Alberta’s remaining five highway maintenance contractors.”

Emcon, a company currently operating in British Columbia and Ontario, said it will hire 10 to 12 mechanics and apprentices as well as more than 60 winter equipment operators. The company promised to maintain the existing workforce, including 300 jobs in winter and 500 in the summer.

“This sale represents the best way forward to maintain safe and reliable Alberta roads, and was the most cost-effective option considered by government,” said Mason in a statement after announcing the sale.

The contractors — Alberta Highway Services Ltd., Carmacks Maintenance Services Ltd., LaPrairie Works Inc., Ledcor Highways Ltd. and Volker Stevin Highways Ltd. — filed papers with the Alberta Court of Queen’s Bench in Calgary.

A judge is expected to review the application in court Sept. 7.

The Alberta government really just didn’t stand up for the Alberta companies in any way in this process.