Debates of October 31, 2024 (day 36)
Member’s Statement 413-20(1): Project Cost Overrun
Thank you, Mr. Speaker. Mr. Speaker, on this Halloween Day, I'm a little bit spooked. I'm scared of a big beast that's out of control and wreaking havoc across GNWT departments. Mr. Speaker, what I'm afraid of is major capital projects cost overruns.
Like any NWT resident, I am concerned by the Auditor general report on Stanton Hospital published this week. Mr. Speaker, $1.2 billion is a lot of money in any case but, most importantly, it is a huge departure from what was originally estimated. Over the last few years, we have seen major cost overruns in many of our large-scale projects. The non-profit Open NWT maintains a list of contracts awarded by the GNWT that end up costing more than 30 percent of their original estimated price. Mr. Speaker, there are more than 2,000 items on that list.
The Inuvik wind turbine project, which my colleague from Inuvik Boot Lake loves so much, that was supposed to cost around $40 million ballooned to an estimated $70 million last year. And the Taltson repair project that was supposed to cost $70 million is now estimated at almost $100 million.
Mr. Speaker, while these individual projects are all concerning in their own right, what concerns me most is the trend I am seeing that when we plan a major capital project, we do not seem to be able to accurately project what the cost is going to be. This fundamentally impacts our ability to make informed decisions. Mr. Speaker, it is not yet clear to me what exactly the specific problem is. Is it our budgeting? Is it project management? I would guess the answer involves a combination of issues. What is clear to me is that we have a systemic problem that we need to gain control of. We need to review this problem not only on a project-by-project basis, but we also need to turn a lens on our systems to determine why is this happening to so many of our projects. Mr. Speaker, I will have questions for the Minister of Finance. Thank you.
Thank you, Member from Frame Lake. Members' statements. Member from Mackenzie Delta.