By Canadian Press

Feds ordered savings review for Gordie Howe bridge over cost concerns: documents

Apr 19, 2018 | 2:45 AM

OTTAWA — Officials overseeing construction of a new cross-border bridge in Windsor, Ont., cobbled together a variety of cost-saving measures on government orders over concerns that expenses were in danger of exceeding spending targets, newly released documents show.

Internal and external advisers helped officials find savings on the Gordie Howe International Bridge “without significantly changing the risk” to the government, noted one slide from a presentation that was delivered to senior government officials last October. Insiders say the Crown agency overseeing the project heard concerns from the three bidders vying to build and operate the bridge about meeting the government’s budget expectations.

A group of deputy ministers was briefed about the spending review, the effects on cash flow, the risks to private capital and project timelines. All dollar figures have been blacked out from the documents obtained by The Canadian Press under the Access to Information Act on the grounds the information could harm Canada’s economic and financial interests.

The Liberals will find out in the next few weeks if the savings identified in the “affordability review” will yield the intended results when financial bids are filed.

The winning bid will be selected in June and construction is expected to start in the fall with work to take four to five years to complete. The entire bridge project is expected to cost $4.8 billion.

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Infrastructure Minister Amarjeet Sohi said all of decisions on the project were aimed at “de-risking the project as much as we could to move forward.”

In return, the government and the private company that is to build and operate the new crossing together hope to collect enough toll revenue over the first 30 years of its life to recoup the cost. If revenues over that time fall short, federal officials expect to recoup spending over the total life of the bridge — 99 years.

“The project has to get done, otherwise the consequences would be catastrophic to the Canadian economy,” said NDP MP Brian Masse, who represents a Windsor riding.

“We’ll have to see how they steer through the complications of a (public-private partnership) and I just hope the government has a backup plan,” he said of concerns raised about the project in recent weeks.

The private owners of the existing Ambassador Bridge across the Detroit River are lobbying the Trump administration to force Canada to use American steel in exchange for continued presidential approval. And the Liberals have faced questions about how Trump would react to have Canadian construction firm Aecon involved in the bridge if the Liberals approve its takeover by a Chinese, state-run company.

Insiders have downplayed concerns on both fronts, saying U.S. steel is already planned for use in the bridge and that bidders have backup plans in case any companies have to be replaced.

Over the summer, the Liberals green-lighted replacement of the Ambassador Bridge, prompting questions about how committed the Liberals are to the Gordie Howe. The government pushed back, saying the plan was always for two crossings over the Detroit River.

The briefing note, marked “secret,” said the federal communications efforts hit their mark: Media reported that “a replacement span is not imminent” because governments had to issue demolition permits for the existing structure before construction on a replacement span started.

“Still, it is important that the government reiterate their commitment to this project given recent media coverage,” the briefing note says of the Gordie Howe bridge, adding “strategic, factual and co-ordinated information” on the project would “assure stakeholders.”

Conservative infrastructure critic Michael Chong said the documents make clear that allowing a replacement — and competing — cross-border span just north of the Gordie Howe bridge spooked bidders about the financial viability of the project.

“The financial viability of this bridge is a real risk because of the government’s mismanagement of the project, but also because of their granting of a permit for a second bridge. I think this document proves that point,” Chong said.

— Follow @jpress on Twitter

Jordan Press, The Canadian Press

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