Cancelling Site C dam would ‘cost a fortune’

The cancellation or suspension of BC Hydro’s Site C hydroelectric dam would eliminate billions of dollars’ worth of planned contract work, even as critics question whether there is sufficient demand for the highly contested megaproject.

The future of the $8.8-billion dam has been in question since the B.C. NDP and Green party formed a coalition earlier this week, giving the parties the makings of a narrow minority government over the Liberals.

B.C. NDP Leader John Horgan sent a letter to Jessica McDonald, president and CEO of BC Hydro, on May 31, asking the company to defer any future Site C contracts that do not include penalty-free cancellation clauses.

A spokesperson for the company said in an email that BC Hydro’s CEO “has received Mr. Horgan’s letter and is reviewing it.”

In the letter, Horgan said most B.C. voters wanted the project “reviewed or stopped,” and reiterated his party’s position that the project should be independently reviewed by the British Columbia Utilities Commission before it moves ahead. However, analysts question the wisdom behind cancelling the project midway through construction.

“It’s going to cost a fortune to cancel it,” said Frederic Bastien, an analyst with Raymond James based in Vancouver.

Construction of Site C began two years ago after receiving federal regulatory approval and is expected to come online in 2024. Bastien estimates the project is roughly 25 per cent complete, and still requires billions of dollars in contract work before the dam comes online.

Acciona Infrastructures Canada Inc., Petrowest Corp. and the Canadian division of Samsung Group are part of a consortium responsible for the $1.5-billion main civil works contract for Site C. Other companies involved include a consortium between Bird Construction and ATCO, responsible for providing worker accommodation at the site. ATCO has already constructed a 1,600-person housing facility for workers, according to Raymond James research.

The B.C. Liberal government has faced immense pressure from environmental groups, First Nations communities and local residents to cancel the development. Some Site C opponents say the project is being built on a shale rock foundation that could be susceptible to structural faults.

Some observers question whether B.C. will actually need Site C to meet its electricity demand.