Independent review for troubled $3.9B North Shore sewage plant

Independent review to be conducted for beleaguered $3.9 billion North Shore sewage treatment plant

Early 2024 construction progress on the North Shore Wastewater Treatment Plant. (Metro Vancouver Regional District)

A day after BC Premier David Eby suggested an independent review should be carried out on the ballooning costs to complete the North Shore Wastewater Treatment Plant, the Metro Vancouver Regional District announced this afternoon that the analysis would be performed.

“I’ve expressed the provinces’ concern a few times now about resolving what drove the cost overruns at the North Shore Plant, and I think that the time has really come for Metro Vancouver to hire an auditor, independent of them, to dig into this and provide a report to everybody,” said Premier David Eby when asked during a press conference on Monday.

“But to ensure a full-scale review of that project, it’s high time for Metro Vancouver to bring an auditor to have a look at that… For Metro Vancouver, I think it would be very helpful for us to have an independent eye on what’s driven the cost overruns on that particular project to know what additional steps are required to ensure accountability of Metro Vancouver. If the officials at Metro Vancouver can’t ensure taxpayer accountability of the expenses incurred there, obviously the province will have to step in.”

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In March 2024, the regional district revealed the latest cost for the partly built, much-delayed sewage treatment plant near North Vancouver’s waterfront will carry an estimated cost of $3.86 billion to complete — an increase of over five times from the original estimate.

When major construction work first began in 2018, the project had a budget of $700 million and a completion date of 2020. However, the regional district charges that the project’s previous main contractor, Acciona Infrastructure Canada, completed 80% of the plant’s design and 30% of its construction, with only half of the 2.8 million cubic feet of concrete poured to date.

The regional district has so far placed much of the blame on Acciona for the cost overruns, delays, and poor quality of construction work. These claims have yet to be proven in court; both the regional district and the company are suing each other, with the regional seeking $500 million in damages and the company looking to recover $250 million in unpaid costs.

north shore waste water treatment plant north vancouver

Early 2024 construction progress on the North Shore Wastewater Treatment Plant. (Metro Vancouver Regional District)

The issue over the beleaguered project resurfaced in more recent weeks, since late May, after the regional district’s board of directors approved a controversial cost-sharing plan, which spurred suggestions of further audits and examination of the regional district’s project management practices.

Under the cost-sharing plan, North Shore households will cover 37% of the cost overruns, and households in all other areas of Metro Vancouver will cover the remaining 63%. North Shore households will see $590 in additional annual costs for 30 years, while households in the region’s three other sewage service catchment areas will pay between $80 and $150 more per year for 15 years. These fee hikes begin in 2025.

In a statement this afternoon, George Harvie, the chair of the regional district’s board of directors and the Mayor of Delta, says he is initiating an independent review of the project’s costs.

“Since announcing the cost estimate for the North Shore Wastewater Treatment Plant Program, we have heard concerns about whether Metro Vancouver is managing costs effectively for the public,” said Harvie, who says this will add to the findings made by the regional district’s task force, which was established under the board’s direction.

After it was made apparent the project had hit major obstacles, the task force looked at three separate updated cost estimates that gave the regional district a better idea of the final estimated project cost. An external expert panel also reviewed this previous process.

“The cost estimates considered market conditions, inflation, interest rates, hiring a new contractor, and cost of materials and labour. Task force meetings were held in closed [sessions] due to the nature of the subject matter discussed, which included commercial matters and litigation,” continued Harvie.

Completion of the North Shore Wastewater Plant’s conveyance pump station at the First Narrows under the Lions Gate Bridge. (Metro Vancouver Regional District)

Jerry Dobrovolny, the regional district’s commissioner and chief administrative officer, says that shortly after he joined the organization in late 2019, he was asked to conduct a comprehensive review of its project management practices “because they recognized the challenges that the organization would face while delivering the many large projects it needs to build.”

Prior to joining the regional district, Dobrovolny was the chief engineer and general manager of the City of Vancouver’s Engineering Department. When he became the regional district’s chief bureaucrat, the North Shore plant project was already well underway in the construction process.

“We immediately reviewed Metro Vancouver practices, which resulted in recommendations for improvements. As a result, we established a project delivery department as a centre of project delivery expertise for the organization, restructured our procurement and real estate services department, and implemented enhanced project management processes,” said Dobrovolny.

“It is extremely important to me that the public trust the work that Metro Vancouver does… I am confident in the process improvements I have implemented and welcome an independent review of the North Shore Wastewater Treatment Plant Program costs as initiated by the Board Chair.”

2024 artistic rendering of the revised design for North Shore Wastewater Treatment Plant. (Metro Vancouver Regional District)

If the revised project direction keeps its course, the North Shore plant’s new main contractors — PCL Construction and AECOM — will bring the facility to substantial completion in 2030. When operational, the plant will solely serve the long-term sewage treatment needs of the North Shore’s growing population and businesses and provide superior tertiary treatment. The existing 1961-built Lions Gate Wastewater Treatment Plant, located under the north end of the Lions Gate Bridge, only provides a low standard of primary treatment and will be decommissioned after the new plant is operational, with the land restored and returned to the Squamish Nation.

The regional district is facing heat not only for the North Shore plant project but also for the $10 billion new Iona Island sewage treatment plant near Vancouver International Airport, with site preparation construction work now well underway. Households in Vancouver, UBC, the University Endowment Lands, and parts of Burnaby will see separate major increases in their annual fees, as the Iona plant directly serves their sewerage service catchment area.

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