Big projects under a big microscope
UPAC, inspector general watching 375th and rail contracts for collusion
Such major public projects in Montreal as the proposed $5.5-billion commuter light rail line and the city’s 375th anniversary celebrations are on the radar of anti-corruption agencies, which say they’re in “lookout” mode for any sign of collusion.
The head of Quebec’s anti-corruption squad, Robert Lafrenière, and Montreal’s inspector general, Denis Gallant, revealed their watchdog activity on Thursday while participating in a conference that’s examining the role and value of inspectors general. The two-day conference at Palais des congrès is organized by Gallant’s office.
The Caisse de dépôt et de placement du Québec, the province’s pension fund manager, presented an ambitious plan in April to build a 67-kilometre electric rail network. The developer of the project is a subsidiary of the Caisse.
“We’re on lookout,” Lafrenière said of the project. “(With) a file of such importance, we’d like to know the contracts, what will happen. We’re watching it closely.”
UPAC has carried out the same watchdog role with a massive project to dismantle and rebuild the Turcot Interchange, he said.
Still, the Turcot project is fully public, while the light rail project is mostly private since it’s a subsidiary of the Caisse de dépôt that’s developing it. The Caisse said it’s prepared to invest $3 billion toward the rail line’s construction, and the rest would have to come from public coffers.
Lafrenière said it’s important for his agency to be vigilant when a project carries such a large price tag.
“We have people doing analysis,” he said. “It doesn’t mean we’ll intervene. It doesn’t mean we’ll launch an investigation as such. But I think it’s our obligation to be on the lookout and, as needed, do prevention.”
Gallant said the light rail project is still only a plan on paper, but said his office will also watch it closely if city finances enter into it. He added that he expects that to be the case, in part because the route would mean infrastructure work on city streets.
“We look at a project and say there are risks in the project,” Gallant said. “Risk, for example, of collusion, risk of embezzlement, risk that contract rules (aren’t respected).”
Gallant offered the city’s 375th anniversary celebrations in 2017 as an example of a large public investment that his office is monitoring.
“It’s human nature — a lot of contracts are coming at once and there are deadlines,” Gallant said. “It’s next year, not in two or three years. So that can influence prices. And it can bring certain entrepreneurs ... to either engage in collusion or artificially inflate the prices.”
As the Montreal Gazette has reported, several contracts for the 375th anniversary celebrations have been awarded despite being about 20 per cent above the city’s estimate for the work. Civil service reports have indicated that a large number of public infrastructure projects has meant fewer entrepreneurs are available to bid and some of them — or their subcontractors — have raised their prices. Prices may be high simply because of market demand, Gallant said. On the other hand, the city has to conduct internal estimates before going to tenders, he said. “Generally, if the percentage difference is too high, in my humble opinion, the city should stop it, re-evaluate its needs and maybe return to a call for tenders.”
Cartels have been illegal in Canada for over a century, Matthew Boswell, senior deputy commissioner of competition at the Competition Bureau, told the audience, composed of members of investigative agencies and inspector general offices from around Canada and the United States.
On the other hand, he added, no one has ever been sent to prison for collusion.
“It’s not something I’m personally very happy about,” Boswell said. Those convicted for a cartel offence have received a conditional sentence, he said, meaning that they serve their sentence at home or in the community.