Contractor terminated for "abandoning" $1-billion North Shore sewage treatment plant

Construction progress of the North Shore Wastewater Treatment Plant, as of October 2020. (Acciona/Metro Vancouver Regional District)

After putting the project to provide North Shore municipalities with a new and expanded sewage treatment plant in limbo, the construction contractor’s contract worth over $1 billion will now be terminated by Metro Vancouver Regional District.

In a statement late Friday afternoon, the regional district says it was unable to resolve its issues with Acciona Infrastructure Canada on their readiness to resume construction on the North Shore Wastewater Treatment Plant, which is only partially built and facing years-long delays and major cost overruns.

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The builder laid off 130 staff in late September 2021, down from about 300 workers earlier in the year. In its initial reaction early this month, the regional district said this amounted to Acciona “abandoning” the project.

Jerry Dobrovolny, the regional district’s commissioner and chief administrative officer, says the project is already 2.5 years behind schedule. Furthermore, the regional district has been informed by Acciona that they require an additional two years and an increase in the budget, which would nearly double the original contract price.

Artistic rendering of the North Shore Wastewater Treatment Plant. (Acciona/Metro Vancouver Regional District)

Acciona Infrastructure Canada, a division of Spanish engineering conglomerate Acciona, was chosen by the regional district in 2017 to build the project following a bidding process. Construction initially began in 2018.

The contract’s original completion was late 2020 with a budget of $700 million. After Acciona raised issues with completing the project within the contracted schedule and budget, the regional district made amendments to the contract in 2019 and provided the contractor until late 2023 to build the plant.

As of this past spring, the updated project cost reached $1.058 billion, reflecting the increased costs of the renegotiated contract and additional construction time allocated, which was pushed to 2024. But Acciona still wanted more funding and an extended timeline that puts the project’s completion beyond the middle of this decade.

“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 Dobrovolny.

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

The regional district says it will now proceed with selecting a new contractor to resume and complete construction.

A panel of “expert advisors” with extensive experience in major capital infrastructure projects is reviewing the process of selecting a new contractor, overall project design, and revised budget and schedule.

North Shore Wastewater Treatment Plant North Vancouver

Artistic rendering of the North Shore Wastewater Treatment Plant. (Acciona / Metro Vancouver Regional District)

Acciona is also the main construction contractor for two major transportation infrastructure projects by the provincial government — the $1.4-billion replacement Pattullo Bridge, and the $2.8-billion SkyTrain Millennium Line Broadway Extension.

Both transportation projects began major construction activities earlier this year, with the bridge scheduled for completion in 2023, and the subway in 2025.

As well, Acciona is currently in the process of building BC’s most expensive infrastructure project ever — the $16-billion Site C hydroelectric dam, now set for completion in 2025 after expensive delays.

The new North Shore Wastewater Treatment Plant is intended to provide wastewater with tertiary treatment — a significant improvement from the primary-only treatment of the Lions Gate facility. When complete, it would treat about 100 million litres per day under normal conditions, and up to 320 million litres per day when storm water enters the sewer system.

Additionally, the plant would have green design features such as using the generated biogas to create electricity for operating the plant and heating the facility, heat recovery capabilities that reduce greenhouse gas emissions by 7,200 tonnes annually, and an odour control system that would make odour undetectable in the adjacent neighbourhood.

Site plan of the North Shore Wastewater Treatment Plant. (Acciona / Metro Vancouver Regional District)

Artistic rendering of the North Shore Wastewater Treatment Plant. (Acciona / Metro Vancouver Regional District)

The plant is being built on a 7.6-acre former industrial site, previously a rail yard for BC Rail, near the North Vancouver waterfront — just north of Seaspan’s main shipyards hub. The site is framed by West 1st Street to the north, Pemberton Avenue to the east, Phillip Avenue to the west, and railways to the south.

The regional district is in the early stages of a $1.3-billion expansion of the wastewater treatment facility in Langley Township, set for completion in 2026. It is also planning a $10-billion wastewater treatment facility northwest of Vancouver International Airport — replacing the aging facility on Iona Island — which is anticipated to be operational by 2034.

There are also a number of other concurrent utility projects by the regional district, including the Second Narrows Water Supply Tunnel of providing a new seismic resilient way for water originating from the North Shore reservoirs to make its way to the communities south of Burrard Inlet. Earlier this month, the regional district announced it had reached a major project milestone of completing the 1.1-km-long tunnel structure using a boring machine.

More than a decade ago, the regional district hit trouble with its contractor for the boring of two seven-km-long water supply tunnels deep under Grouse Mountain, connecting North Shore reservoirs to the new Seymour-Capilano Filtration Plant. The contractor, citing safety concerns with unstable rock conditions, was eventually dismissed and sued by the regional district, and another company was contracted to finish the work. The project reached completion in 2015, after years of delays and added costs.

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