SNC-Lavalin wins $660M LRT deal from Ottawa — the city

Embattled construction and engineering company SNCLavalin has won a $660-million contract from Ottawa — the city, not the federal government — to extend a light-rail transit line.

The City of Ottawa selected SNC to build a 12-kilometre extension to the Trillium Line and a four-kilometre connection to the airport, a project that includes maintenance of the system for 27 years, the Montreal-based company announced Thursday. It’s part of a larger $4.66-billion transit expansion in the city, with Nebraska-based Kiewit Corp. and France’s Vinci Construction winning the rest of the work.

The contract win sheds light on SNC’s opportunities in Canada as it fights charges of bribing Libyan government officials to secure contracts. If it’s found guilty, it could be restricted from bidding on federal contracts for up to 10 years.

As SNC’s attempt to negotiate a remediation agreement instead of going to court dominates headlines, questions remain over whether other projects would get the green light if it is found guilty of bribing Libyan government officials to secure contracts.

Most big infrastructure projects in Canada, particularly transit ones, are built with funding from municipal, provincial and federal governments.

“That’s the hard question,” AltaCorp Capital analyst Chris Murray said Thursday. “There’s a broad debate that’s happening right now inside public works about what the actual rules should be.”

City staff in Ottawa concluded SNC will be able to do the work, regardless of the outcome of the charges.

SNC is allowed to bid on projects under an administrative agreement with Public Services and Procurement Canada it signed in 2015 after being charged with bribery. The agreement was the first under a revised integrity regime designed to be less harsh on companies that had yet to be convicted for criminal charges.

“They’ve got a very viable business. It’s technically a good company, a good competitor. We would expect they continue to both bid and win,” he said.

Still, SNC itself is bracing for potential consequences if the charges do go to trial and result in a guilty verdict.