Cost of MPI upgrade balloons to $290M
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The massive overhaul and upgrade of Manitoba Public Insurance’s online system is expected to cost three times as much as projected, and take nearly twice as long to complete.
The mammoth information technology project to move MPI services online was initially expected to cost $86 million and take two to three years.
In its annual business plan last year, MPI said the total cost would be $128.5 million.
In minutes from an MPI meeting earlier this year, its board was told the tech transformation, dubbed Project Nova, will end up costing between $257 million to $289 million. Rather than taking 40 months to complete, it will take 60 months, the board learned.
The NDP grilled the Progressive Conservative government in question period Thursday about the escalating cost and delay.
“It could’ve been done a long time ago if PCs hadn’t interfered,” said NDP Leader Wab Kinew.
He blamed the huge delay on former premier Brian Pallister, a former insurance broker, for trying to help his “friends.” The NDP accused Pallister of meddling in MPI’s push to online services that are also offered by brokers.
Premier Heather Stefanson shot back. She said the only interference she’s aware of is the former NDP government meddling in Manitoba Hydro affairs, that resulted in construction of Bipole III and Keeyask costing nearly $4 billion more than expected.
The minister responsible for MPI says Project Nova’s delay had nothing to do with broker negotiations or interference.
“I’m always concerned any time that something costs more than anticipated,” Kelvin Goertzen said Thursday.
Updating and expanding MPI online services — which former MPI president and CEO Ben Graham in 2020 likened to a relic Atari gaming system — has been a major undertaking, the minister said.
“When they begin, they do their scoping and often they find things that are more challenging, more difficult security issues,” Goertzen told reporters after question period.
“They realize they have to go a little bit further when it comes to security,” he said. “They had to re-scope the project. They realized it was going to be more in-depth than they thought, (with) more security issues that they needed to address,” he said.
“I think the tech a lot of the brokers are dealing with is more than 25 years old,” he said.
The increased cost won’t result in a price hike for MPI customers, he insisted. “Funds have been set aside to upgrade the technology,” Goertzen said.
“This is a long-term plan that does not impact rates, but will benefit the service and ensure the service is secure,” he said.
MPI spokeswoman Naline Rampersad said the initial plan underestimated and did not fully account for “readiness work.”
As work progressed to transition five major technology systems to new platforms, MPI uncovered gaps within the Crown corporation that were crucial to successfully completing Project Nova, she said Thursday.
Internal and independent third-party reviews made it clear the delivery timeline needed to be extended by two years to address the gaps, she said.
That resulted in “significant implications” for the overall budget and delivery timeline, but was a critical step in “de-risking” a project of its size. She said the revised budget and timeline align with the experience of other large insurance organizations that have replaced their core technology, without offering an example.
After 20 years of reporting on the growing diversity of people calling Manitoba home, Carol moved to the legislature bureau in early 2020.