Police HQ project manager tells inquiry he was unfairly blamed for cost overruns

A project director for the Winnipeg Police Service headquarters project said he took ample and unfair blame for cost overruns on the work.

Ossama AbouZeid testified at the public inquiry into the project Wednesday morning. When asked by his lawyer, Jamie Kagan, if he would ever work for the City of Winnipeg again, AbouZeid answered “never, never.”

He noted he left the city shortly after he made a presentation to city councillors about the rising cost of the project in 2013, when he felt he was blamed for the results.

Kagan noted the city also at one point sued AbouZeid both at a personal and corporate level. In 2022, the city alleged AbouZeid received a $105,000 kickback on the project from a company owned by Armik Babakhanians, the owner of Caspian Projects, the key contractor on the HQ project.

However, the allegations weren’t tested in court. The city’s claim against AbouZeid was later withdrawn and court records show it was dismissed in January 2024.

The inquiry did not hear any evidence that such a payment was made.

AbouZeid said money he received from Caspian Projects covered a remaining interest in 2245 McGillivray Blvd. He said he sold most of his investment in that property to Babakhanians in 2005, but didn’t settle the final amount until April 2011.

Serious concerns with the headquarters project at 245 Smith St. have plagued city council for years. The building opened in June 2016 at a cost of $214 million, well above its original $135-million price tag. An external audit concluded it was severely mismanaged.

Multiple legal challenges followed the HQ construction. In 2020, the City of Winnipeg launched a civil suit against Caspian and dozens of other defendants in which it alleged a fraudulent scheme inflated the price of the project.

Gabrielle Lisi, a lawyer for the city, directly asked AbouZeid about allegations of fraud linked to the project.

“You were not part of, or privy to, any conspiracy to defraud the city? Is that right?” asked Lisi.

“Correct,” answered AbouZeid.

The former project manager also agreed with a city question that stated it was critical for Caspian to submit true, uninflated costs for the project to ensure it stayed within an early guaranteed maximum price of $137.1 million.

“This is the heart of the (guaranteed maximum price) concept,” said AbouZeid.

On Wednesday afternoon, an engineer who worked at AECOM, the initial designer on the project, answered many questions about delays in his company’s work.

Myron Paryniuk, who worked for AECOM until 2013, said there were many factors that slowed down the completion of design drawings, including the city taking months longer than expected to award one phase of the contract.

Paryniuk said insufficient staffing on the city’s side of the complex project also stalled progress at times, leading AECOM to often wait for answers to design questions.

He said changes to what the city wanted from the project also affected deadlines.

“It was simply a constant state of revision and evolution to meet the programming requirements of (Winnipeg Police Service),” said Paryniuk.

Heather Leonoff, the legal counsel for the provincial inquiry, noted emails show some discussion took place about having AECOM report to Caspian.

Paryniuk said AECOM would “absolutely not” have supported that change.

“It would not be a transparent system. The contractor would direct, AECOM in this case, on how to design, what to design,” he said.

Paryniuk said that would risk the design team’s independence and professional judgment.

“We would decline that opportunity. And, if we had to, we would have walked away,” he said.

He said AECOM took great strains to be a team player on the project but eventually opted to move on after a dispute over how complete their drawings were.

“We essentially came to terms with the city to leave the project. We could not work in that environment. (It was), I would suggest, a probably toxic environment … Our reputation and professional qualifications were at stake and we feared that if we continued with the project, those would be impacted,” said Paryniuk.

AECOM believed it did meet a key deadline to complete drawings by having them ready to support the permit and tendering stages of the project, despite still needing some additional work, he testified.

Evan Roitenberg, a lawyer for the city’s former chief administrative officer Phil Sheegl at the inquiry, pressed Paryniuk about AECOM’s belief the drawings were complete. He suggested it made sense for the city to believe that meant no further work would need to be done on them.

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The engineer said he believes that issue may stem from a misunderstanding.

“If there was a miscommunication with Ossama AbouZeid (that) we didn’t clarify, we apologize for that. But the deliverable was always providing complete drawings for permit and tender issue,” he said.

The inquiry will resume on March 9.

joyanne.pursaga@freepress.mb.ca

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Joyanne Pursaga
Reporter

Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.

Every piece of reporting Joyanne 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.