Critic says convention centre overrun is ‘approaching fast-ferry fiasco in magnitude’
Derrick Penner
Province
Work continues Wednesday on the Vancouver convention centre expansion, after latest budget hike. Photograph by : Glenn Baglo, Vancouver Sun
The budget for the Vancouver convention centre expansion project has ballooned to $883.2 million, $83-million higher than the figure the provincial government used as recently as February, Tourism, Sports and Arts Minister Stan Hagen revealed Wednesday.
Hagen said the cost is being driven higher by a challenging construction site, unprecedented cost inflation and a late request to add more artwork and finishings to make it more of a landmark.
Hagen and developer David Podmore, who was hand-picked by the government to take over the project and its dramatically escalating cost in April, unveiled the new figure at a news conference.
The province’s contribution to the project will be $541 million. The rest will be paid for by the federal government and Tourism Vancouver, and with revenue from leasing retail space in the building.
Podmore said the government agreed to his request to increase the project’s budget to add more local artwork and other finishings that will make it a local landmark similar to the new international terminal at Vancouver International Airport.
“When people walk into this building, I tell you, their jaws are going to drop,” Podmore said.
He added that he was “pleased cabinet supported me in a very substantial budget to finish the interior of the building.”
Hagen said the new figure is the project’s final budget. It is more than 10-per-cent higher than the $800 million the province used as recently as February, 43-per-cent higher than the $615 million cited by the province in 2005, and 56-per-cent more than the $565-million budget Premier Gordon Campbell said would be the price tag when he and then federal industry minister David Emerson broke ground on the project in November 2004.
It is 78-per-cent higher than the $495 million cost when the project was first devised prior to 2001.
However, Hagen characterized the expansion project as one of the province’s most important economic-development initiatives, which will generate billions of dollars in new tourism.
He added that the expanded centre has booked 54 events for after it opens in 2009, 29 of which would not have been accommodated in the existing centre, and which will generate $1 billion in economic activity.
“The cost of not building this project would have been far greater,” Hagen said.
Harry Bains, the NDP’s Olympics critic and MLA for Surrey Newton, expressed confidence in Podmore but said Wednesday announcement was meant to deflect attention away from mismanagement of the project.
“These are just another [set] of numbers,” Bains said of the project’s latest budget.
Bains said government ministers, including Campbell, have assured the public that previous budget figures would be the final cost and “I don’t believe the public will trust these numbers.”
“I think what we’ve seen today is a clear display of mismanagement and incompetency of this government and the last board of this [convention centre expansion company],” Bains said.
Bains added he was most disappointed that “no one has been held accountable.”
Maureen Bader, B.C. director of the Canadian Taxpayers Federation, said mismanagement of taxpayer dollars has defined the convention centre expansion from the start, and the cost overrun “is approaching the fast-ferry fiasco in magnitude.”
Podmore said 80 per cent of the new budget is now set, including a $537-million set-price contract that he reached with the expansion’s main contractor, PCL Constructors Westcoast Inc., in late May.
He added that the only major contracts that have not been awarded are an upgrade for the existing Vancouver Convention and Exhibition Centre and final finishing for the new building, which he said will open March 15, 2009.
He said those items will not further increase the cost.
“I’m putting my neck on the line,” Podmore said. “I don’t expect to be back, I don’t want to be back. I won’t be back to ask for more money.”
Podmore said it was always the project corporation’s intent to reach a set-price contract with PCL, which was initially hired as a fee-for-service construction manager.
Negotiations were protracted because of complications with the waterfront site. Anibal Valente, PCL’s vice-president and district manager, said the project was “kind of a moving target” because it was being designed as it was being built.
He said that fixed-price contracts add a natural incentive to complete projects on time because the contractor keeps any money that is saved by finishing early. If it is late, however, Valente said “it will be on our nickel.”