Prime Minister Stephen Harper toured Yukon Energy's Mayo hydro dam on Friday, along with Premier Dennis Fentie and utility officials. (CBC)

The head of Yukon Energy Corp. says he's pleased to have a tentative deal with a U.S.-based company to build a new power plant at the Mayo hydroelectric dam, but whether the company will actually win the contract will depend on its numbers.

The territory's public utility has signed a memorandum of agreement with Kiewit Corp. after a multinational engineering and construction company was selected from a shortlist of five competing firms.

The utility and Kiewit still have to agree on a price for the construction contract, Yukon Energy president David Morrison told CBC News. If Kiewit's price comes in too high, Morrison said, the project will be put out for competitive bidding.

"We've got numbers from our engineers, and we have done quite a bit of work," Morrison said Monday. "We know where these numbers should come in at, so we'll either come in at those numbers or we'll look at another way of getting the work."

Providing early expertise

Yukon Energy is spending a total $160 million on what it calls the Mayo B hydro expansion project, $120 million of which will be for the new power plant.

While Kiewit has not officially won the construction contract, Morrison said the company is getting $300,000 at this time to provide its expertise during the project's design stage.

Morrison described Kiewit as "the most qualified contractor in certainly western Canada when it comes to building small to mid-size hydro projects."

"They have an extensive background and experience and we're pretty pleased that they're part of this project at this point," he added.

Kiewit Corp. is based in Omaha, Neb., but has offices in Alberta, British Columbia and Saskatchewan.

The remaining $40 million being spent on the Mayo B expansion will be used to link power lines between the new power plant and Yukon Energy's existing Whitehorse-Aishihik power grid. A contract for that work will be tendered soon.

Contract 'stimulating economies': Harper

Prime Minister Stephen Harper mentioned the memorandum of agreement between Yukon Energy and Kiewit to reporters on Friday, as part of his tour of the Mayo dam in central Yukon.

At the time, Harper and Yukon Premier Dennis Fentie said they were not concerned that an American company was getting a major contract that is funded in part by the Canadian government's economic stimulus plan.

"We have been critical of the 'Buy American' proposals in the United States. We do not think those kinds of proposals are good for the world economy," Harper told reporters in Whitehorse on Friday.

"All of our national governments are stimulating our economies — not just to stimulate economic activity in our own country but to encourage trade and encourage global growth."

Fentie said Kiewit's practice in Canada has been to maximize benefits for local people in the regions where they are working.