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Local 113 questions TTC contract award to Bechtel

dailycommercialnews.com
April 28, 2015
By Richard Gilbert

A local transit union is raising concerns about the $80 million sole-source contract the Toronto Transit Commission (TTC) awarded to Bechtel Canada Co. to complete the Toronto-York Spadina Subway Extension (TYSSE).

"It is definitely concerning and that is why we are trying to wave the flag and give notice to city hall and some of the representatives," said Bob Kinnear, Amalgamated Transit Union Local 113 president, which represents 10,000 TTC operations and maintenance staff.

"From our perspective, their track record is not all that great and it doesn't reflect the fact they should have been sole-sourced and arbitrarily picked by Mr. Byford without doing background checks and seeing if there was another competitive bidder out there that has a better record."

The TTC announced on April 13 that it has signed an $80 million deal with Bechtel for project management of the TYSSE. A sole-source contract was used to minimize procurement time.

"We recognize the importance of the Spadina subway extension to Toronto and are fully committed to playing our part in the safe completion of this project by December 31, 2017," said George Morschauser, Bechtel's rail operations manager in a statement.

"We look forward to working with the Toronto Transit Commission to deliver a quality, operational subway."

TTC CEO Andy Byford was given approval by Toronto City Council on March 31 to implement a reset plan for the TYSSE, which is plagued by cost overruns and delays.

The plan involves stripping project control from the TTC's management team and hiring Bechtel as a third party project manager.

"The contract value to Bechtel is based on staffing costs, management fees and incentives to open the subway extension by Dec. 31, 2017," said a TTC press release.

"Bechtel staff begin work today (April 13) and will form an integrated team with existing TTC personnel. The Bechtel contract will expire March 31, 2018. Bechtel's project director will report directly to TTC CEO Andy Byford."

City council voted 40 to 3 to increase the Capital Budget and 2016-2024 Capital Plan for the TYSSE project by $150 million.

"I am surprised that so many city councilors did not put up opposition to the plan considering the current city policy that this should be put out to tender, and there is a process that was not followed," said Kinnear.

Kinnear is concerned Bechtel was the lead contractor on the Central Artery/Tunnel Project in Boston, which had an initial cost of $2.5 billion and is the most expensive highway project in U.S. history.

The project replaced Boston's deteriorating six-lane elevated Central Artery (I-93) with an eight-to-ten lane underground highway, two new bridges over the Charles River, extended I-90 to Boston's Logan International Airport and reconnected downtown Boston to the waterfront. Construction began in Sept. 1991 and was completed on Jan. 13, 2006

In July 2012, the chief financial officer for the Massachusetts Department of Transportation said the cost to complete the project was $24.3 billion. The state owed $9.3 billion in principal and interest, with payments scheduled to 2038.

The project was plagued by escalating costs, scheduling overruns, leaks, design flaws, poor execution, use of substandard materials, criminal arrests and one death.

A fatal incident raised safety questions and closed part of the project in the summer of 2006, when ceiling panels and debris weighing 26 tons fell on a car and killed a passenger.

As a result of the death, leaks, and other design flaws, the project consortium agreed to pay $407 million in restitution, and several smaller companies agreed to pay a combined sum of about $51 million. The TYSSE is 70 per cent complete, but a TTC report released on March 20 said the initial completion date at the end of 2016 and budget are not achievable.

"If Byford wasn't responsible or aware of some of these issues and cost overruns than he should be on the unemployment line," said Kinnear.

"It is shocking that he was basically let of the hook by firing two employees."

As part of the reset plan, Byford fired TTC chief capital officer Sameh Ghaly and chief project manager Andy Bertolo on March 19.

Initially, the cost of the 6.2 km extension in Toronto was estimated to be $1.5 billion. But, this increased to $2.1 billion in 2006 when the extension was expanded by 2.4 km to Vaughan in York Region. The current cost of the project is $2.78 billion, which includes the latest cost increase of $150 million.