Site C rallies from Code Red

The Site C power-generation project has unique chameleon characteristics — it can change colours at will to suit B.C. Hydro’s preferences. CEO Chris O’Riley showed off the talent last month when submitting a progress report on the project.

The quarterly report covered the JanuaryMarch activities at the $10.7-billion construction site on the Peace River. They were problematic to the point that he classified the project as code red.

But when he filed the report last month, he noted subsequent developments had eased the level of concern, so it was downgraded to code yellow. It’s the difference between having “serious concerns” and “some concerns.” It was accomplished by potentially committing another $325 million to the project.

On a project that big, in such a legally and politically fraught landscape, yellow is likely as good as it’s going to get for the next several years until the 2024 target completion date.

The changing colour scheme was in a report B.C. Hydro provided the B.C. Utilities Commission. It was filed last month, the 11th update since the previous B.C. Liberal government committed in 2014 to starting the project.

It said the project is on time and on budget (the recently hiked, much higher budget). But safety issues, arguments over past contractor disputes, yet another pending injunction application and a problematic highway realignment “all contribute to serious concerns with the overall project health. ”

Some of the disputes involve the admission last fall that the project could not meet the 2019 target date for diverting the river. That major undertaking has to be pushed back a full year, which threw a wrench into various other schedules and added hundreds of millions to the budget.

But in a letter written three months after that reporting period, O’Riley told the commission that Hydro worked with the contractor to settle diversion delay issues and has a new memorandum of understanding on an updated contractual schedule.

It also includes accelerating some critical construction activities, buying more equipment and offering many incentive payments to the contractor if it meets project milestones. Total potential cost of all those new arrangements is $325 million.

Hydro plans to draw on the contingency budget to cover those additional costs and can manage, it says, with no impact to the overall budget.

The safety issues that contributed to the code-red label involved two lost time injuries, six medical attention treatments and five near-misses. Work on a tunnel was suspended for 24 days after some sprayed concrete dislodged, which could have seriously injured someone.

WorkSafe and the energy minister both issued inspection reports and wrote several orders against one contractor.

All those incidents prompted an enhanced safety regime.

O’Riley said that with the contractor differences resolved, a revised contractual schedule and a strengthened project team with more independent oversight, “B.C. Hydro is in a stronger position to deliver Site C within budget and on schedule.”

“The overall health of the Site C project has returned to ‘yellow.’ ”

But there are still some wild cards. The West Moberly and Prophet River First Nations filed treaty-infringement suits over the project and were in court last month asking for an interim injunction. If successful, that could halt work until a verdict following a full hearing on the infringement case. Courts have rejected similar applications, but an injunction would return the project to condition red immediately.

While awaiting a verdict on the bands’ court application, work has been suspended on clearing a right-of-way for a transmission line.

Site C survived the change of government after the NDP reluctantly concluded construction was past the point of no return. B.C. Hydro’s self-assessed condition red, as of last spring, was the most dire assessment to date of the three-year-old project.

It dug itself out of that hole and back to condition yellow, but it takes five pages to list all the remaining risks, and most of them will be in play for the next five years.

Les Leyne covers the B.C. Legislature for the Victoria Times Colonist.