A new report at Winnipeg's city hall raises the possibility that a labour dispute could shut down work on the city's new water-treatment plant.

The latest update on the plant, received by the city's finance committee on Tuesday, reminded councillors that labour agreements for many of the construction trades are up for renewal on May 1, 2007.

The report says negotiations with the Construction Labour Relations Association of Manitoba are underway, and indicates there is "some potential for a labour disruption."

The report said a work stoppage would put the the water-treatment project on hold.

"We specifically don't know 100 per cent, but I guess our sense is that it would probably close the project down, being that a majority of the trades that are employed by various contractors would erect picket lines and we wouldn't be able to enter the site, and work would either slow or stop completely," said Mike Shkolny, manager of engineering with the city.

An official with the city said at this point, there is no word on the state of negotiations, or the likelihood of a labour disruption. However, he said the issue is now on the radar, so politicians and the public are aware of the possibility.

Peter Wightman, executive director of the Construction Labour Relations Association of Manitoba, confirmed that talks are underway with more than 15 trades. 

Wightman said he is very optimistic that new agreements will be reached without any work disruptions.

The water-treatment plant has already generated its share of controversy; it was supposed to cost $230 million, but last May councillors were told the price had increased to $300 million, due in part to inflation and increases in costs of building materials and labour.

While noting that "prices remain volatile due to the active construction market, the labour shortage and increases in the cost of materials and fuel," Tuesday's report indicated the $300-million estimate "appears to be adequate."

Construction of the water-treatment plant is scheduled to be completed by the end of 2008.