Metro Vancouver Regional District has terminated the $1-billion contract with Acciona to build the North Shore Wastewater Treatment Plant.
“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. This project is already two and a half years behind schedule, and they’ve informed us that they require an additional two years. They’ve also asked for an increase in budget which would almost double the original contract price,” said Jerry Dobrovolny, commissioner and CAO of Metro Vancouver.
“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.”
Metro Vancouver will now proceed with selecting a new contractor to deliver the project, and has engaged a panel of expert advisors with extensive experience in major capital infrastructure projects to review the process of selecting a new contractor, overall project design, and revised budget and schedule.
Acciona Wastewater Solutions LP was selected through a competitive process in 2017 to construct the project. The original completion date of the project was end of 2020. In 2019, at the request of the contractor, the contract was revised to provide an additional two-and-a-half years to complete the project (end of 2023), along with an increased budget. Metro Vancouver said it continued to uphold the terms of the contract, including making all payments due in a timely fashion but that Acciona has missed key construction milestones.
In response, Acciona has called the decision “regrettable” and “unnecessary” while claiming it is owed about $100 million in contracted work for which it has not received payment.
The company maintains that it continues working on the wastewater treatment project, contrary to recent statements by Metro Vancouver officials.
“Metro Vancouver knows that the North Shore Wastewater Treatment Plant project has been fraught with unforeseen challenges from the outset. And it knows that for the past six years,” said the company in a statement.
