Don't worry about Atcon loan guarantees: minister
Taxpayers don't need to worry about the $50 million in loan guarantees given to a Miramichi company that just lost a multimillion-dollar bridge contract, the minister of Business New Brunswick says.
"To date, no loan has been called, nothing. You know Atcon, I'm hoping, is going to continue to be a successful New Brunswick company," Victor Boudreau said Friday.
The Atcon Group was recently removed from the $165-million Deh Cho Bridge contract in the Northwest Territories because it couldn't agree on terms for the second phase of construction with the bridge's developer.
On Thursday, Opposition Leader David Alward questioned whether taxpayers would be on the hook for the millions in loan guarantees the Graham government gave to Atcon, based on the assumption it would be building the bridge.
But the provincial loan guarantees included $10 million in 2009 to build a steel fabrication yard in Miramichi, which will still be useful, Boudreau said.
"This fabrication facility was for this project, but could also be used for many other projects," he said.
"Atcon is not a one trick pony; they don't just have one contract that they're working on. So we're hopeful that once this facility is complete they'll be able to produce these types of beams and continue that work for other projects."
Boudreau could not cite any example of future projects, but said he has faith in Atcon.
"Look, I don't know the interior workings of the company," he said. "I know they have employees throughout the country working on various projects."
The province, just like banks, has to take risks, Boudreau said. And when banks are pulling back because of the poor economy, the province has to take bigger risks. But it all helps to keep people working, he said.
In 2008, the province also gave Atcon a $13.3-million loan guarantee to allow the company to qualify to bid on the bridge project. It was all part of a larger package of loan guarantees worth $50 million.
On Wednesday, government officials said the status of the loan guarantees remains "unchanged," despite Atcon losing the bridge project.
Alward called that "asinine," arguing that if Atcon can't repay its lenders because it won't be getting whatever money it was counting on from the second phase of the bridge project, that's when the loan guarantees will kick in and taxpayers will have to pay up.