Unknown cost overruns caused by York University Pan Am stadium delays
Consortium that built stadium for Pan Am Games say it is owed additional costs, but the province won’t pay.

thestar.com
July 20, 2015
By Jennifer Pagliaro

The contractors who built the Pan Am Athletics Stadium at York University claim they are owed additional costs after months-long delays and “unforeseen” work.

But the final amount for which taxpayers could be on the hook is a secret.

The discovery of “unidentified” asbestos both above and below ground, “unforeseen” underground conditions and a 2013 winter storm left stadium construction behind schedule and caused additional costs not anticipated in the stadium’s original $45-million budget, according to internal reports obtained by the Star through a freedom of information request.

Construction contracts worth $206 million for three major Pan Am venues - the Hamilton soccer stadium, the Milton velodrome and the York University stadium - were all awarded to Ontario Sports Solutions (ONSS), a consortium formed by Kenaidan Contracting Ltd. and Bouygues Building Canada Inc.

A report filed by ONSS in May 2014 outlined its claims regarding the 12,500-seat, open-air stadium built at York University’s Keele campus, saying additional costs and time were needed to complete the project before athletes arrived earlier this month.

But according to the report, Infrastructure Ontario, the provincial agency managing the project, said the risks and costs were carried by ONSS alone. That dispute is ongoing.

Today, organizers claim they have delivered the Games on time and on budget. But many of the final costs, including construction claims, will likely not be resolved until after the medals are handed out and the athletes return home next month.

Infrastructure Ontario refused to say how many claims have been lodged by contractors or how much money the claims represent. They also would not clarify who is ultimately responsible for cost overruns at the York stadium or whether there are outstanding claims in Hamilton or Milton.

Communications manager Terence Foran said the projects for which Infrastructure Ontario is responsible all came in under budget and that construction claims are a normal part of major projects such as the Pan Am/Parapan games.

“Since these claims are currently being discussed and negotiated amongst the project sponsors and TO2015, unfortunately I cannot comment further,” Foran said in an email.

David Kirkland, executive vice-president and COO at Kenaidan, said he is contractually barred from commenting on the claims.

Both Infrastructure Ontario and the TO2015 organizing committee responded to questions by saying athletes and spectators are impressed by the new facilities.

The contract between Infrastructure Ontario and ONSS lays out a mediation and arbitration process for disputes over costs and delays.

ONSS is responsible for reasonably avoiding any delays and for working around them. The contract also allows Infrastructure Ontario to withhold payment - in some cases, double the amount of any costs - if work is not done accordingly.

The 2014 report from ONSS said “major problems” remained with “non-compliance” issues. Of those, ONSS said delays and costs due to “extreme weather” were the greatest concern.

If adjudication, arbitration or the courts were to find the claim or delay is reasonable, then the province could be forced to pay. What’s not clear is the scope of the overruns.

The contract does deal with bad weather and unexpected contamination. The consortium is also required to have insurance against the unforeseen cleanup of hazardous substances, including fungus and mould. But the limits of those financial obligations are unclear because parts of the contract are redacted from public view.

According to a schedule in the 2014 ONSS report, several construction milestones were up to three months off course when the claims were submitted.

While budgets for some major Pan Am venues have increased since construction began, others have fallen below original estimates. Organizers have said they may come under budget by $56 million in the capital costs for all venues. As of May, organizers said they had spent just over 80 per cent of their $672-million capital budget on construction costs.

The York stadium is not the first ONSS project to face delays and cost overruns.

The Hamilton soccer stadium has been repeatedly cited for construction deficiencies after a problem with a bankrupt subcontractor and the harsh winter - which almost saw the Ticats Labour Day CFL classic relocated and the city on the hook for $1 million per game.

Infrastructure Ontario was holding back $22 million in payment on that project ahead of the deficiencies being fixed. Meanwhile, subcontractors on the project claimed in March they were owed $2 million in unpaid work by ONSS.