Montreal

MUHC settles with SNC-Lavalin over cost overruns

The McGill University Health Centre has reached an out-of-court settlement to the tune of $108 million with the SNC-Lavalin-led consortium that won the contract to build the Glen site superhospital.

Quebec's Health Ministry confirms out-of-court settlement totalling $108M

The Montreal engineering giant had been suing the MUHC for $330 million over the contract to build the superhospital, alleging last minute changes to the contract significantly boosted construction costs. (Melinda Dalton/CBC)

The McGill University Health Centre (MUHC) has reached an out-of-court settlement to the tune of $108 million with the SNC-Lavalin-led consortium that won the contract to build the Glen site superhospital.

The Montreal engineering giant had been suing the MUHC for $330 million over the contract to build the superhospital, alleging last-minute changes to the contract significantly boosted construction costs.

In a release from Quebec's Health Ministry, a spokesperson confirmed the settlement with the McGill Healthcare Infrastructure Group (MHIG) — a consortium composed of SNC-Lavalin and its U.K. partner Innisfree — adding that the agreement was the product of four months of mediation.

In the original lawsuit, SNC-Lavalin alleged that the Quebec government and the MUHC significantly changed specifications and surface-area requirements for the new Glen site hospital after the contract was signed and construction was underway.

The Health Ministry said that much of the $108 million payout will go toward covering fees already owed.

According to a statement issued by SNC-Lavalin Monday, the consortium "is responsible for managing the hospital centre's assets and ensuring its upkeep until September 30, 2044."

$125M for the CHUM

In a separate release also issued Monday morning, the ministry's office responsible for modernizing Montreal hospital centres disclosed the details of another settlement — this one concerning the Centre hospitalier de l'Université de Montréal (CHUM).

The French superhospital reached a $125-million deal with its builder, the Collectif Santé Montréal, which had been suing the CHUM for $367 million over delays.

While the settlement was reached out of court a year ago, the details weren't released until after negotiations between the MUHC and SNC-Lavalin were completed.

The CSN labour federation, which represents almost 300,000 workers, slammed the settlements, calling it evidence that the public-private partnerships responsible for the construction of both superhospitals "will collectively cost us dearly over more than 30 years."

"The government maintains that budgets are being respected for these projects," said the CSN in a statement. "But the real costs are only going up."

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