The proposal is that we would negotiate with a joint venture between E. Gruben’s Transport and Northwind Industries in Inuvik. E. Gruben’s is in Tuk.
Is anyone sharing any risk on this particular highway besides the Government of the Northwest Territories?
Thank you, Mr. Hawkins. Sounds like a political question. Mr. Miltenberger.
Thank you, Madam Chair. Clearly, the Government of the Northwest Territories is the proponent and we’re going to oversee this. We have a $200 million contribution. We’re going to be responsible for building it on time. We’re going to be responsible, God forbid, should there be any cost overruns. We are the major proponent. The folks doing work with us in the private sector will have their own liability insurance for different areas of work, but in terms of being responsible for the overall project, that’s going to be overseen by the Government of the Northwest Territories through the Department of Transportation.
I want to say I apologize for when the Minister said God forbid there be any overruns, I said that that’s hypothetical. At least it would be a hypothetical answer by the Minister, I guess, considering any question in that regard last week was hypothetical. At least now you’ve validated that real possibility. It’s odd what a week does.
On the royalty discussion, this is no surprise to the folks in our gallery, and I’m certainly not uncomfortable asking this question. It is a fair and reasonable question on the budget. How much is the territorial government on the hook for royalties? Just be clear, as we all know, and in case the public is following, because I know they read over Hansard with great interest. The Government of the Northwest Territories will be paying for gravel. We will be, obviously, compensating for loss of land whether it’s purchase or replacement. The issue of the over and above just based on royalty, I know they have a land claim agreement that certainly entitles them, and my question has always been around skinning the game. What is the royalty rate requested by the IRC?
Thank you, Mr. Hawkins. Minister Ramsay.
Thank you, Madam Chair. We are still in active negotiations with the IRC on the rate of granular royalties for the project, and I wouldn’t want us to get into negotiating a deal on the floor of the House today. I think we have to let the process work itself out. We will arrive at a figure and when we do, we will share it with Members.
With the budget publicized, how do we know that we’re going to get the best price for this particular project?
Thank you, Mr. Hawkins. Minister Miltenberger.
Thank you, Madam Chair. That’s the whole point of all the estimating we’ve been doing. This has to be a fair deal. We have to get value for money. This is not a cost-plus contract. Everybody that’s involved in this project knows how difficult it is to come by money of this magnitude and the need to provide the public clear evidence of value for money.
I’m not seeing the gap here. If we told everybody how much we have for this particular road estimate, our fine work all done. Of course, a $300 million road, everyone knows what it’s worth and we’re going to negotiate a contract. What’s to stop the joint venture from asking for, in all intents and purposes, the full $300 million?
Thank you, Mr. Hawkins. Mr. Neudorf.
Thank you, Madam Chair. The $300 million is made up of many different components for the project including the construction cost, obviously, but project management, additional design contingency, so the information about how much is exactly available for construction of the road is still to be determined, and will only be fully known once we actually decide on the procurement process and get the contractor to do the work.
The deputy minister said earlier that they needed to drill more holes, I assume to test gravel sources. Where is the gravel that they believe they’ve found? Is it enough and what’s the quality of the gravel? In essence, what does drilling more holes and testing mean?
Much work has gone on in the past in the Beaufort-Delta to look for granular deposits, and we have sifted through all of that information to come up with a plan for where we will get our granular material required to construct the road. We do want to go back and drill some more holes so that we can have some more certainty on both the quality and the quantity of granular that’s there. But based on the information that’s available, we’re comfortable that we will be able to prove up the resources that are there.
The other part of geotechnical is to conduct drill bore holes at all of the bridge sites so that we can finalize the design on the foundation for the bridges, and then also to look at various places along the proposed highway alignment so that we can better understand some of those areas that are going to be a little bit more challenging to build some road subgrade on and come up with the optimal solution for those areas. Thank you, Madam Chair.
I am curious on how the department is familiar with construction techniques on this area of permafrost. As we all know, Highway No. 3 has its I’ll call it technical challenges rather than laden it with some description probably fair and certainly unfair. That said, the constant excuse I’ve heard was the reason Highway No. 3 is the way it is in its own state is the ice lenses. I believe it was interesting terminology picked out of the air a number of years ago to explain why the permafrost is fluxing and the matter of the ice lenses. Those were Department of Transportation words, so I don’t have to provide anyone further elaboration of what that means.
How do we know that our construction techniques will prove themselves of quality in nature in that particular area considering we are building a year-round road? As we heard, there is significant concern with the ground that this is going to be built on, the amount between the amount of material required and build-up. Do we have any proven techniques and where do we look to see them demonstrated that we can build a road at this price in this particular area using what techniques? Thank you.
Madam Chair, as part of the design team that has been designing the project, reviewing it, we have international experts in permafrost that are providing input to us and to the design. Within DOT itself, we have many engineers with expertise on permafrost. We have been working on subcommittees that are doing reports, preparing nationally developed guidelines for construction on permafrost. We are taking all of that information and using it to optimize the design of the road. Thank you, Madam Chair.
Thank you, Mr. Neudorf. Mr. Hawkins, your time is up. Let me read the page again. Page 5, 2013-2014 Supplementary Appropriation, No. 1, (Infrastructure Expenditures). Transportation, capital investment expenditures, highways, $60 million, not previously authorized, $60 million, total department, not previously authorized, $60 million. Mr. Dolynny.
Thank you, Madam Chair. We are faced now with the ultimate go/no go scenario. We knew that was going to happen later today. It’s unfortunate that we are late in the evening now, after a very glorious day in terms of signing of devolution and now we are doing a second major milestone here for the 17th Assembly all within eight hours, so it’s quite a lot to take in for a lot of us. I know many of us are tired and I appreciate everyone here who has some input into this project.
I liken this to no different than if I was a CEO of a company and I had a board of directors who were pitching a project. I would make sure that I would do my due diligence before, as a CEO or Member of this House, offering my blessing, I guess, of a project of this magnitude, given the fact that we’re dealing with still some very unknown variables out there.
I just want to put in a little bit of an earmark of the fact that we have heard today, time and time again, that we are only at 85 percent of the design build, that 15 percent of this highway is still with a question mark. If I was a CEO of a company with a board of directors giving me a pitch of a project of this magnitude, as CEO I would say, really I have to make a decision with a 15 percent variable in it. It’s a lot of faith that you’re putting into that person to have to make a decision with a lot of, I guess, so-called unknown variables to move forward with.
We have also been led to believe from the get-go of this project of the federal commitment to the project, and we are very thankful for that. We continue hearing 75/25 throughout the whole project. That was echoed loud and clear, not only from the Minister of Finance, but the Minister of Transportation, that we would not proceed until there was a definite 75/25 split. We found out from today if we add the pre-work, and if my calculations are correct, we are in it for 35.7 percent given the fact that we have to add the pre-work in there and the fed’s commitment at 64.3 percent. It’s very clear that we are quite a bit different from this so-called 75/25. That definitely translates… That 10 percent variance or 10.7 variance truly means that we have an extra $33.3 million that we are actually holding the bag on that changed in a matter of hours. This 75/25 changed within hours of a $30 million more commitment to the taxpayer on this project.
What really concerns me, as someone who has done major construction building in my past, that when we look at a project of this magnitude, we tend to or government tends to layer components out of the whole asset or total asset cost of a project. For example, if we’re doing work on a building or whatever, remediation work or tear-down work, doesn’t necessarily add to a total project cost at which time the total cost then becomes minimized or marginalized to which it should be.
I’m saying that because we can’t forget about all of work that went into this project. There was $12 million worth of work. We are led to believe that that $12 million of due diligence is just, as the department indicates, due diligence. It’s totally unfortunate that we can’t capitalize that as a whole asset of this whole project. I say that with conviction, because if we don’t capitalize this, we have many hundreds of kilometres of road left to build. If every hundred kilometre segment of this road is out of the same pretence of due diligence work that is 100 percent on the taxpayers’ shoulders and we can’t capitalize that and we can’t do any type of cost sharing with the federal government, those millions of dollars will add up over time. We have I would say probably over another thousand kilometres-plus of road to construct and I’m very concerned.
I can tell you, if I add it all up, this government has made it extremely, extremely hard to support this. They should have made it easier to support it.
As I said earlier, I applaud the work of the people up in the Beaufort-Delta. I applaud the work of the IRC. I applaud them. They are very well organized. They have done their homework. They have lobbied very well. They have bent the ear of the federal counterparts. They deserve our admiration for being a workhorse towards this project. I say that with conviction. I can’t say the same for this government.
We had an opportunity to lead by example, to work in conjunction, in partnership. We keep hearing this all the time, to work in partners. We did not do our job, in my humble opinion. We could have done a better job. We could have done a better job communicating this project all the way through. We did not need to leave to the 11th hour, information that the public should have had access to, as we heard from some of my colleagues, so that we could do a proper, informed decision. For that I’m very disappointed; very, very disappointed. This government had the means, had the knowledge and had the willpower. They chose not to or they were very selective to what was given or what was not given.
That actually works against the consensus style of government. By not sharing and not coming forward with information on a timely basis, a divide occurs amongst the membership in all aspects of this House. There was no need to pit Member versus Member. There was no need to pit rural and remote and urban. There was no need for that. But by not doing what I consider the job of government, that’s exactly what we did. We pitted each other on this project and we didn’t need to do that at all.
I hope that this project has taught us something. I say “we” because I’m part of it. I hope this project taught us humility. I hope this project taught us how not to do things the next time a large project comes on the table, and I’m hoping I’m here for that. Causing this divide amongst us was very unfortunate. I don’t believe it was our finest hour in politics. I don’t believe it was our finest hour in our large capital projects that this government has undertaken over the years that it has.
As I said earlier, I supported this project from the get-go. I questioned its math. All I asked was the math be transparent. I asked for the risk to be put on the table. I stand by that conviction as I do today, as I did yesterday, and as I did almost 16 months ago as a Member coming into this Assembly.
I will be supporting this project, but I can tell you this, I hope government is listening, I hope the department is listening, I hope the Ministers are listening. I know the Premier is listening because he’s looking at me. Thank you, that’s all I’m asking. So thank you very much, committee. Thank you very much Members. Thank you to the people up in the gallery here from Inuvialuit. We can do better next time, folks. Thank you.
Thank you, Mr. Dolynny. Committee, we’re on page 5 of the tabled document, 2013-14, Supplementary Appropriation No. 1, (Infrastructure Expenditures), Transportation, capital investment expenditures, highways, not previously authorized, $60 million, total department not previously authorized, $60 million.
Agreed.
Thank you, committee. Does committee agree that we have concluded consideration of Tabled Document 50-17(4), Supplementary Estimates (Infrastructure Expenditures), No. 1, 2013-14?
Agreed.
Thank you, committee. Mr. Menicoche.
---Applause
Madam Chair, I move that consideration of Tabled Document 50-17(4), Supplementary Estimates (Infrastructure Expenditures), No. 1, 2013-2014, be now concluded and that Tabled Document 50-17(4) be reported and recommended as ready for further consideration in formal session through the form of an appropriation bill. Thank you, Madam Chair.
---Carried
Mr. Menicoche, what is the wish of committee?
Thank you, Madam Chair, I move that we report progress.
---Carried
Report of Committee of the Whole, Madam Chair.
Thank you, Mr. Speaker. Mr. Speaker, your committee has been considering Tabled Document 49-17(4), Supplementary Estimates (Infrastructure Expenditures), No. 3, 2012-2013; and Tabled Document 50-17(4), Supplementary Estimates (Infrastructure Expenditures), No. 1, 2013-2014, and would like to report progress with two motions being adopted, and that consideration of Tabled Document 49-17(4) and Tabled Document 50-17(4) is concluded, and that the House concur in those estimates and that appropriation bills to be based thereon be introduced without delay. Mr. Speaker, I move that the report of Committee of the Whole be concurred with.
Thank you, Ms. Bisaro. A motion is on the floor. Do we have a seconder? The seconder is Mr. R.C. McLeod.
---Carried
Mr. Speaker, I move, seconded by the honourable Member for Yellowknife South, that Bill 4, Appropriation Act (Operations Expenditures), 2013-2014, be read for the third time.
Bill 4 has been read for the third time.
---Carried
Please be seated. It’s been a long day.
---Laughter
Mr. Speaker and Members of the Legislative Assembly, good evening.
As Commissioner of the Northwest Territories, I am pleased to assent to the following bill:
Bill 4, Appropriation Act (Operations Expenditures), 2013-2014.
During this session the Government of the Northwest Territories will be introducing the following bill for consideration by the House:
Supplementary Appropriation Act (Operations Expenditures), No. 1, 2013-2014.
The government considers this bill essential to the good conduct of government business and, as such, I recommend its passage. Thank you, merci beaucoup, mahsi cho, quanani, koana.
Orders of the day for Tuesday, March 12, 2013, 1:30 p.m.:
Prayer
Ministers’ Statements
Members’ Statements
Returns to Oral Questions
Recognition of Visitors in the Gallery
Acknowledgements
Oral Questions
Written Questions
Returns to Written Questions
Replies to Opening Address
Petitions
Reports of Standing and Special Committees
Reports of Committees on the Review of Bills
Tabling of Documents
Notices of Motion
Notices of Motion for First Reading of Bills
Motions
Motion 8-17(4), Secondary Diamond Industry
First Reading of Bills
Second Reading of Bills
Consideration in Committee of the Whole of Bills and Other Matters
Bill 1, Tlicho Statutes Amendment Act
Bill 2, An Act to Amend the Territorial Parks Act
Committee Report 1-17(4), Report on the Review of the 2011-2012 Northwest Territories Human Rights Commission Annual Report
Tabled Document 43-17(4), Supplementary Estimates (Infrastructure Expenditures), No. 4, 2011-2012
Tabled Document 44-17(4), Supplementary Estimates (Operations Expenditures), No. 4, 2011-2012
Tabled Document 45-17(4), Supplementary Estimates (Operations Expenditures), No. 3, 2012-2013
Report of Committee of the Whole
Third Reading of Bills
Orders of the Day
Thank you, Mr. Clerk. Accordingly, this House stands adjourned until Tuesday, March 12th, at 1:30 p.m.
---ADJOURNMENT
The House adjourned at 8:36 p.m.
