Three rivers still vex Mackenzie Valley fibre line installers

Three challenging river crossings near Fort Good Hope, N.W.T. stand in the way of contractor Ledcor completing the already-troubled Mackenzie Valley Fibre Link.

'The biggest risk areas right now are the three major river crossings,' says territorial official

'The Rabbitskin River crossing is a risk, and there is no doubt about it,' says Sandy Kalgutkar (second from the left), Deputy Secretary to the Financial Management Board. (CBC)

Three challenging river crossings near Fort Good Hope, N.W.T., stand in the way of contractor Ledcor completing the already-troubled Mackenzie Valley Fibre Link.

On Tuesday, officials with the Department of Finance told regular MLAs that about 120 kilometres of the 1,154-kilometre line to Inuvik still need to be built.

The $82-million fibre line was supposed to be fully "in service" by Aug. 31, 2016, according to the project agreement signed by the territorial government and Ledcor.

But after several subcontractors left the project — citing logistical challenges, harsh working conditions and disorganization within Ledcor — the government revised that timeline, saying it hoped to cut the ribbon on the project by June 2017.

Officials now say that remains the hope but are also citing a drop-dead deadline of August 2017. 

Digging a trench to lay fibre optic cable near Inuvik, N.W.T. (David Thurton/CBC)

"If Ledcor is not able to have the fibre in place and operating according to spec by that date, then they are technically in default," said Sandy Kalgutkar, deputy secretary to N.W.T.'s Financial Management Board.

Kalgutkar told the Standing Committee on Priorities and Planning that Ledcor has had difficulties drilling under Rabbitskin River near Fort Good Hope. The river had been flagged as a problem area by Ledcor early during the installation. 

"They took four or five attempts at it and were not able to get the fibre through the riverbed," he said. "They are working with some fairly internationally known horizontal drilling expects to ensure they have an executable plan for the 2017 season."

The two other challenging river crossings are the Loone and Tieda, both north of the Rabbitskin River.

New contractor could be called in 

Kalgutkar said if Ledcor fails to meet the August 2017 deadline, the territorial government could call in money that would have gone to Ledcor, and use that money to hire a different contractor to finish the job.

Under the project agreement, Ledcor and its partner Northwestel, which will operate the line, will eventually be paid through a series of annual payments totaling $234 million over 20 years, but only once construction concludes and only if the line is working to the satisfaction of the government.

The government has already withheld an initial $10-million payment from the companies because they didn't meet the original August 2016 "in service" deadline.

Officials said Ledcor and Northwestel are currently paying over $200,000 a month to their lenders — underscoring the financial pressure the companies are under to finish the line.

Julie Green, MLA for Yellowknife Centre, questioned Kalgutkar on the risks still facing the project.

'I am worried about the project,' says Julie Green, MLA for Yellowknife Centre. (CBC)

"There do seem to be a number of risks at this point to completing the project on budget and on time," she said.

"Their room for margin of error has gone way down."

Green wants the territorial government to rethink how it oversees public-private partnerships.

"P3s need their own oversight, and that oversight is really beyond the ability of regular MLAs to provide out of their own knowledge," she said.

"What I would like to see is third party oversight where we get an outside of government opinion about how well the P3 is working. I think that would allay some of our concerns of this project and others."