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Consulting fees soaring for Greater Victoria sewage project

Greater Victoria taxpayers are paying millions in ballooning consultant’s fees for the region’s sewage treatment megaproject. Engineering firm Stantec has billed taxpayers $7.
A sewage-treatment plant is planned at McLoughlin Point in Esquimalt. A team of 20 at the engineering firm Stantec has helped Capital Regional District staff on sewage issues, reports and design advice.

Greater Victoria taxpayers are paying millions in ballooning consultant’s fees for the region’s sewage treatment megaproject.

Engineering firm Stantec has billed taxpayers $7.3 million for consulting and program management on the Capital Regional District sewage project since 2009, according to documents obtained by the Times Colonist under freedom of information law.

And that’s only the beginning of the fees.

Stantec has approval to double its costs to $14 million by the end of this year.

The engineering firm’s total bill to taxpayers is now projected to reach more than $43 million by the end of the project in 2018, according to additional figures contained in a staff report to the Seaterra civilian commission overseeing the project.

Commissioners will vote on authorizing more money for Stantec on Friday.

CRD staff say the total amount is more likely be $39.56 million, because Stantec is on track to underspend its allowance in 2013.

As it stands, Stantec holds one of the most lucrative contracts in one of the most expensive capital projects in Greater Victoria’s history.

The consulting fees amount to 5.5 per cent of the project’s $783-million total budget, which is far more than the one per cent of budget publicly estimated by the former head of the CRD project when the Stantec deal was signed in 2009.

“I’m alarmed at the costs,” said Saanich Coun. Vic Derman, who sits on the CRD sewage committee that originally approved Stantec’s contract and has twice approved its budget. “Maybe I missed something, but I didn’t think it would be that high.”

Though consultants are necessary on a such a large project, it’s upsetting so much money is spent on one company when politicians are also told it’s too costly to allow an independent analysis of the project or search for new technologies, Derman said.

Stantec chose in 2009 to lock down a long-term consulting gig with the CRD, rather than wait through years of uncertainty to bid on constructing the treatment plant at McLoughlin Point in Esquimalt or the sludge facility at Hartland Landfill in Saanich.

The contract made Stantec ineligible to bid on any other part of the megaproject.

But it also put the firm in a position to profit from the controversial sewage project’s many years of drama, which involved delays, altered plans, reconsiderations and other twists and turns that required Stantec’s services.

A Stantec team of 20 has helped CRD staff research technical sewage issues, contribute to reports, prepare procurement documents, and provide engineering and design advice.

“They are very important because they are the only technical consultant we have on contract at the moment,” said Albert Sweetnam, the sewage project director. “We rely on them extensively.”

Some of the Stantec advice has led to key decisions on the project’s size and scope. Other advice, such as a report used to recommend the application of sewage sludge to land, has been shot down by local politicians.

Stantec did not return a request for comment.

“Stantec is not being overpaid,” said Sweetnam. “I’ve looked at the rates. The rates are reasonable.”

The growing bill is another example of strain on the project’s $783-million budget.

Politicians repeatedly aired concerns last week that extra costs for incinerators, barging and other unforeseen expenses may lead to cost overruns borne entirely by local taxpayers.

“Probably four years ago when the budget was negotiated it was a pretty good budget, but as time marches on it might not be adequate,” said CRD sewage committee chairwoman Denise Blackwell.

“Up until this point, there’s been lots of contingency built in, and we were hoping those contingencies would cover it. But they’ve been eaten away.

“I used to be quite convinced it would come in on budget, and I don’t know if I am anymore.”