Atcon admitted bridge delays before $50M bailout

The New Brunswick government knew Miramichi-based Atcon Group was delayed on a major contract when it gave the company $50 million worth of loan guarantees.

The New Brunswick government knew Miramichi-based Atcon Group was delayed on a major contract when it handed the company $50 million worth of loan guarantees.

Business New Brunswick Minister Victor Boudreau said in an interview that his department's officials were aware that the Deh Cho Bridge project in the Northwest Territories would be delayed for a year when the three controversial loans were approved in June.

The N.W.T. government only acknowledged the year-long delay earlier this week.

"We were made aware the delay was coming along the way during the process, and like I said, nothing that was reported [on Tuesday] was news to us," Boudreau said.

"And we continue to follow the file just like everybody else does."

The New Brunswick government has come under fire for the $50-million bailout package because of its size. As well, the auditor general has raised questions about how part of the loan will help Atcon's quarry business when that is prohibited by regulations in the Economic Development Act. 

The delay means the bridge, which will provide a year-round link between many N.W.T. communities and Alberta, will not open in the fall of 2010 as originally scheduled.

Exactly when the bridge will be completed will be determined after the structure's design is completed and approved, Andrew Gamble, project manager with the Deh Cho Bridge Corp., said Tuesday.

Changes to the design, proposed by several international bridge design firms, have meant Atcon has been ordered not to start work on the upper structure of the bridge for now.

The delay may also affect construction costs for the bridge, which are pegged at $165 million.

Work on the span, considered to be the largest construction project the N.W.T. government has ever undertaken, was slowed earlier this year by a work stoppage and by questions raised about the structure's design.

As well, contract disputes between Atcon and some subcontractors have been reported. Neither Atcon nor the bridge corporation has given specifics on the disputes, while the territorial government has refused to comment on them.

Boudreau not worried about security of loans

Even though there is now a significant delay in the project, Boudreau said he's not worried about the security of New Brunswick's $50-million package of loan guarantees.

"Any delay like that on a major project is something nobody likes to see, but it's something that actually happens quite regularly on these big projects," Boudreau said.

"We're confident that Atcon will be able to work out the necessary arrangements with the corporation, but you know that's up to them. We're looking after our part of the project here, our part of the deal that we have with Atcon, and so far things are being made in that regard."

Last year, the province gave Atcon a $13.3-million loan guarantee to help with the same bridge project. That money allowed the company to meet the minimum criteria for the Northwest Territories government to guarantee the entire cost of the bridge.

The New Brunswick government has stated that Atcon has created 78 of the 150 jobs it promised when the first loans were delivered.

Robbie Tozer, Atcon's chief executive officer, said in June that the loans were necessary because the company was having difficulty during the economic downturn. He also said that a recession was no time to stop growing a company.