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Winnipeg Free Press - PRINT EDITION

Airport plan grounded

Leaky pipes, suit over costs put opening on hold

By: Martin Cash

Posted: 09/3/2010 1:00 AM | Comments: 0 (including replies)

Winnipeg's new airport terminal has been delayed by cost overruns and complications that emerged during construction. (KEN GIGLIOTTI / WINNIPEG FREE PRESS)

The Winnipeg Airports Authority and its main contractor on the new terminal project are butting heads in court over what could be millions of dollars in unexpected costs, and now new problems are percolating -- literally -- below the surface that will further delay the opening of the building.

The latest setback is the result of the discovery that pipes laid below the massive concrete foundation are leaking or are filling with silt. Some are bowed and bent.

Barry Rempel, CEO of the Winnipeg Airports Authority, said Thursday airlines are being contacted and planning is underway to push back the opening of the building until the new year.

"We just will not be able to open in the fourth quarter," he said.

Since the schedule uncertainty has come right before the busiest travel period of the year, Rempel said he would not risk disruption to the carriers and tenants by forcing them to move in the middle of the busy Christmas season.

Rempel said work is "aggressively" taking place to find a solution for the leaky pipes, but he said he could not say what has caused them.

"I wish I knew how long it will take or how big a deal it is," he said, adding it was not a structural problem.

And while airport management deals with that crisis, it is also waiting for a ruling from Justice Albert Clearwater on an appeal of an arbitration ruling that could add millions of dollars to the WAA's bill from the construction company.

The original contract with EllisDon signed in January 2007 was for $267,279,035. Work on the site started Feb. 14, 2007. (The total project costs including the terminal, parking, roadways and other infrastructure will be about $585 million.)

EllisDon filed a contract arbitration claim in October 2007 to resolve a dispute as to who should be responsible for additional costs -- and 20 weeks of additional work -- regarding excavation shoring that was required after it became clear the original 45-degree sloped excavation was not holding.

In September 2009, arbitrator Robert Dewar ruled that the WAA is contractually liable "to pay for the damages sustained by the plaintiff (EllisDon Corp.) arising from the requirement to perform slope stability remedial work."

The WAA has appealed the ruling, claiming the arbitrator erred in his interpretation of construction safety regulations. At issue is whether construction-industry regulations require shoring for every excavation more than three metres deep.

Clearwater's decision may come in the next few days or weeks.

No costs have been set, but in an affidavit filed by Robert Edgar, the WAA's program manager, he said, "I have been informed by representatives of EllisDon that the quantum of damages for which the WAA may be liable will be very significant and is anticipated to be in the millions of dollars."

Rempel said, "If we win the appeal it will be back to Square 1. We believe, on a narrow point of law, that a condition was not considered by the arbitrator." He also said the amount of damages will be "hotly contested."

The delay caused by the excavation challenges meant the date for the turnover of the building was pushed back to Aug. 13, 2010.

Now that date has come and gone and Rempel said he does not know when "substantial performance" will be achieved.

"They (EllisDon) have not offered and we are not accepting delivery of the building until it meets its intended purpose."

EllisDon officials declined to comment on the issue, deferring to the WAA.

Rempel said while the latest delays are concerning, they are "not fatal." He said the fact the WAA still has a functioning terminal means there is no dire urgency to rush the new terminal opening.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 3, 2010 B4

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