Ottawa

SNC-Lavalin city's top choice for $600M LRT expansion

SNC-Lavalin is the City of Ottawa's top choice to build the $600-million Trillium Line extension during the second phase of Ottawa's light rail project, CBC News has learned.

Southern Trillium Line extension including airport link due to be completed by 2021

SNC-Lavalin is the preferred proponent to construct the north-south Trillium Line. (Chris Rands/CBC)

SNC-Lavalin is the City of Ottawa's top choice to build the $600-million Trillium Line extension during the second phase of Ottawa's light rail project, CBC News has learned.

The Montreal-based company, currently embroiled in political controversy, is one of three pre-qualified bidders for the southern extension, which would add 16 kilometres and eight new stations, including a spur to the Ottawa International Airport, by 2021.

According to multiple sources with knowledge of the issue, SNC-Lavalin has emerged from a competitive bidding process against two international consortia as the city's preferred proponent. A technical briefing on the awarding of the contract is expected at City Hall next week, and council debate the choice at a meeting on Feb. 27,with a final vote set for March 6.

The company is already a leading partner in Rideau Transit Group (RTG), which is constructing the east-west Confederation Line — a project that appears to be running at least a year late. And, as part of RTG, will also be responsible for maintaining the system, worth more than $2 billion over the contract's 30 years.

Under the rules for Stage 2 bidding, none of the major partners in RTG were allowed to bid for the Confederation Line extension, as they were thought to have an unfair advantage.

RTG players were allowed to bid for the north-south Trillium Line project, however. Only SNC-Lavalin did so, under the name TransitNEXT.

The company declined comment for this story.

Choice likely to raise eyebrows

The choice of SNC-Lavalin is sure to raise eyebrows.

The company is at the forefront of a political furor that involves, among other headline-grabbing elements, whether it would have to face criminal charges of fraud and corruption in connection with payments of almost $48 million to Libyan officials, and allegations it defrauded Libyan organizations of an estimated $130 million.

If found guilty, SNC-Lavalin could be blocked from bidding on federal government contracts for a decade. Instead, the company asked for the public prosecutor to enter into negotiations toward a remediation agreement. SNC-Lavalin has even filed for a judicial review of the public prosecutor's decision not to meet with the company.

As well, several former SNC-Lavalin executives have pleaded guilty in a corruption case involving the $1.3-billion contract to build Montreal's McGill University Health Centre.

And just this week, reports confirmed that the RCMP are investigating whether high-level officials at SNC-Lavalin were aware of kickback payments made in relation to Montreal's Jacques Cartier Bridge.

Mayor Jim Watson stands by SNC-Lavalin's involvement in both stages of the city's LRT system. (CBC)

'No difficulty' with SNC-Lavalin, mayor says

Asked earlier this week about the beleaguered company's involvement in the $2.1-billion Confederation Line project, and possible contention for the Trillium Line contract, Mayor Jim Watson said he had no concerns.

"We have had no difficulty, obviously, with them from an ethics point of view here in Ottawa," Watson said.

Watson said staff had assured him that SNC-Lavalin's potential involvement in LRT's next stage would put neither the city nor local taxpayers at risk.

Mounting financial pressures

Apart from ethical considerations, the choice of SNC-Lavalin for the Trillium Line project should prompt questions about the company's financial future.

Since it's been facing criminal prosecution, SNC-Lavalin share prices have plummeted. Its chief executive said late last year the simmering scandal has cost the company $5-billion worth of business.

Just this week, debt-rating agency Standard & Poor's downgraded SNC-Lavalin, which has significantly slashed its own earnings projections twice recently.

About the Author

Joanne Chianello

City affairs analyst

Joanne Chianello is an award-winning journalist and CBC Ottawa's city affairs analyst. You can email her at joanne.chianello@cbc.ca or tweet her at @jchianello.

With files from Elizabeth Thompson