City sued over sewage plant deal

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This article was published 20/11/2024 (290 days ago), so information in it may no longer be current.

A company hired to conduct repairs at Winnipeg’s north end sewage plant is suing the city, alleging poor administration of the project resulted in the firm’s contract being cancelled and leaving it out of pocket.

The repairs, to existing power transformers at the site, are on top of a series of massive, complicated upgrades that continue to be delayed and balloon in cost.

The plant is the largest and oldest of the city’s three sewage facilities.

The wider upgrades, first called for in 2003 and initially expected to be completed early last decade, are meant to reduce nitrogen and phosphorous in the water released by the city’s sewage system to protect the health of Lake Winnipeg and are required under a provincial Environment Act licence.

Stark International Inc., a Nova Scotia headquartered infrastructure firm specializing in the installation and repair of power transformers, filed a lawsuit in the Court of King’s Bench last week seeking, at minimum, the nearly $95,000 it says the city owes.

The statement of claim was filed Nov. 12 by Winnipeg law firm Thompson Dorfman Sweatman. It’s also seeking judgment for other alleged losses and claims, special and punitive damages, interest and court costs.

The City of Winnipeg has yet to file a statement of defence.

The city issued a tender in January 2022 for the repair of four power transformers in the north end plant’s existing ultraviolet facility, which tender documents described as “critical to the treatment of wastewater” in Winnipeg. UV light rays disinfect water of certain microorganisms.

The tender also required testing of the transformers and power conductors and the replacement of roofs and other supports.

Stark bid on the tender in February 2022 and was awarded the work the next month. The price of the contract was $108,081.25, plus tax. The firm began the work in May 2022 and was expected to complete it by Aug. 31, 2022, which was “immediately adjusted” to Sept. 27 that year, the claim alleges.

Stark claims the adjustment did not take into account when the city provided its letter of intent to the firm, saying that meant it should have been extended into October 2022.

The city, the lawsuit alleges, was unable to provide Stark with previous technical drawings for the existing transformers as requested in May 2022.

Stark also alleges the contract administrator used by the city, a third party, lacked the competence, skill, neutrality and expertise to perform the role.

The administrator gave Stark the go ahead to begin work on about June 17, 2022. Through July and August that year, the claim says, Stark requested clarifications on contract documents on numerous occasions, but the city failed to respond in a timely manner or at all.

“The city’s inability to provide clear and consistent specifications caused delay on the project and did not permit Stark the ability to proceed with certain portions of the work,” the claim reads.

The work required repairing “very specific transformer equipment and the manufacture of specific roofing structures.” Stark said the city, through its contract administrator, told the firm to order custom materials in September 2022.

In October of that year, Stark told the city it had spent a significant amount on the materials, that the goods had been manufactured and shipped, and that it was prepared to work on Oct. 31, the claims says. The schedule was extended an extra week due to the impact of a hurricane on the Nova Scotia-based company.

The contract administrator told Stark to begin installing the custom materials on Oct. 28, but in early November, Stark recommended the city delay the work, which would include removing roofs, until the following June, in case poor weather damaged the power transformers, the claim says.

The city sent a stop-work order in mid-November, with Stark requesting a meeting, which was refused, the claim says. Stark issued an invoice for $94,775.74 and the city “wrongfully terminated” the contract in December, despite Stark performing work, including building custom structures.

The city has refused Stark’s demands for payment.

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The firm alleges delays with the project were the city’s fault, amounting to breach of contract and breach of duty. Stark also claims the city misrepresented the project.

On Monday, Mayor Scott Gillingham warned the city is in a “crisis moment,” with a new report estimating Winnipeg has about four to six years of capacity left to process sewage sludge into biosolids.

The long-awaited second phase of the wider treatment plant upgrades will construct a new biosolids facility that can handle more material.

The city, province and federal government had a funding deal to complete that second phase for $553 million before the project’s price soared to $1.035 billion. The city is working on securing more money from senior governments, with discussions well underway, Gillingham said Monday.

erik.pindera@freepress.mb.ca

Erik Pindera
Reporter

Erik Pindera is a reporter for the Free Press, mostly focusing on crime and justice. The born-and-bred Winnipegger attended Red River College Polytechnic, wrote for the community newspaper in Kenora, Ont. and reported on television and radio in Winnipeg before joining the Free Press in 2020.  Read more about Erik.

Every piece of reporting Erik produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.