Two former Deh Cho Bridge Corp. officials secured a personal deal with Atcon, the bridge's former contractor, before the N.W.T. government took over the project, CBC News has learned.
Former project manager Andrew Gamble and former chief engineer Jivko Jivkov hired Atcon Industrial Services — a subsidiary of the Atcon Group in Miramichi, N.B. — to build them each a set of custom-made steel pontoons on which they could build houseboats.
The pontoon arrangement took place in 2007, between the time Gamble and Atcon had negotiated a guaranteed price of $132 million to build the Deh Cho Bridge and the time Atcon was awarded the bridge contract.
Market rate paid: Gamble
At the time, Gamble and Jivkov were both working for the bridge corporation, which was in a private-public partnership with the N.W.T. government to build the Deh Cho Bridge over the Mackenzie River.
Once completed, the bridge will span across the Mackenzie River at Fort Providence, N.W.T., providing a year-round road link between Yellowknife and southern Canada.
Gamble confirmed that he and Jivkov each paid Atcon just under $23,000, not including shipping, to build houseboat pontoons for them.
Gamble said the price Atcon offered was lower than quotes he had received from steel fabricators in western Canada, but emphasized that it was a fair and reasonable rate.
"I think if it had been a good, special price, or a bargain price or a gift, I certainly would have been uncomfortable with that. But it wasn't," Gamble said in a recent interview.
"We paid them what was then pretty much a market rate."
CBC News contacted a number of steel fabrication companies in an effort to determine what a fair market price would be for a similar set of pontoons today.
Two companies responded with widely varying estimates. The lowest estimate was $30,000 to $40,000 for one set.
One company estimated that a similar set of pontoons would cost at least $30,000 to $40,000 to make today.
CBC News has learned that Jivkov since sold his pontoons for a profit of about $8,000 to $9,000. Gamble said he is building a retirement house on his pontoons.
Bridge partially built
The N.W.T. government took over full responsibility this year for the Deh Cho Bridge, which remains partially built.
The Deh Cho Bridge Corp. was removed from the project after the territorial government took over. Gamble and Jivkov lost their jobs at the corporation as a result.
Around the same time, nearly all of Atcon's companies were placed into receivership, not long after it was let go as the bridge's general contractor in January.
With a new contractor in place, the Deh Cho Bridge is now scheduled to be completed in November 2011. Current cost estimates for the project have risen to $182 million.
As for the pontoons, an expert on public and private sector business ethics said mixing personal business with work can create the impression of a conflict of interest, even if the officials involved did not benefit.
"The average person looking at this, not knowing one way or the other whether the private arrangement was advantageous to the individual, would always wonder if it did compromise his behaviour with respect to negotiating on a public contract," said John Langford, a public administration professor with the University of Victoria.
Langford said the concern about conflict of interest is the same regardless of whether the officials involved worked for government or the private sector.