Metro Vancouver provided a letter to Acciona Wastewater Solutions LP that indicated Metro Vancouver’s intent to terminate the contract with the company to build the future North Shore Wastewater Treatment Plant.

“Acciona has underperformed and consistently failed to meet its contractual obligations, which include delivering the project on time and within budget, as required under the initial fixed-cost design-build-finance model,” said Jerry Dobrovolny, commissioner and CAO of Metro Vancouver. “This project is already two and a half years behind schedule, and they’ve informed us that they require an additional two years. They’ve also asked for an increase in budget which would almost double the original contract price.”

“Choosing to initiate termination was a difficult but necessary decision after considering all other options,” added Dobrovolny. “Our priority is protecting the interests of our region by delivering this project as quickly as possible with the smallest possible impact to residents.”

Acciona Wastewater Solutions LP was selected through a competitive process in 2017 to construct the project. The original completion date of the project was end of 2020. In 2019, at the request of the contractor, the contract was revised to provide an additional two-and-a-half years to complete the project (end of 2023) along with an increased budget. Metro Vancouver indicated that it continued to uphold the terms of the contract, including making all payments due in a timely fashion. However, Acciona Wastewater Solutions LP has missed key construction milestones.

Acciona Canada’s response

According to Acciona Canada, the action by Metro Vancouver to begin terminating the North Shore Wastewater Treatment Plant contract is regrettable, unnecessary, and not in the long-term interests of Metro Vancouver residents or the environment.

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Image Credit: Acciona

The company noted that it has performed approximately $100 million in contracted work for which it has not received payment. Nonetheless, Acciona indicated that it has continued working on the wastewater treatment project contrary to recent statements by Metro Vancouver officials. It also streamlined its efforts to focus on core project activities to maintain the project critical path and reduced the overall project workforce of staff and sub-contract trades accordingly until the outstanding disputes are resolved.

From the company’s perspective, it has worked diligently, professionally, and in good faith to overcome a continuous array of unforeseen problems starting with flaws in the design provided by Metro Vancouver as part of the original bid process. Acciona has previously initiated several contractual disputes through the agreed resolution process in the project agreement.

For the past six months, Acciona noted that it has been meeting with Metro Vancouver officials in good faith to negotiate a way forward. The company found that “it is regrettable” that Metro Vancouver has chosen to initiate the termination process for its contract with Acciona.

Moving forward

Metro Vancouver will now proceed with selecting a new contractor to deliver the project. It has engaged a panel of expert advisors with extensive experience in major capital infrastructure projects to review the process of selecting a new contractor, overall project design, and revised budget and schedule.

When complete, the North Shore Wastewater Treatment Plant will serve more than 250,000 residents of the Districts of West and North Vancouver, the City of North Vancouver and the Squamish and Tsleil-Waututh Nations.

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