The Auditor General of the City of Quebec notes that there was a management problem in the awarding of one of the three largest contracts for the tramway, due to unreliable estimates.
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The Auditor General of the City of Quebec, Michel Samson, released his annual report on the progress of the tramway project on Tuesday. He looked at several aspects, including contract management. Of the three largest contracts for the tramway, he noted that the management of additional expenses in those awarded to Tram-Innov and Systra Canada for the design is “adequate”.
But for the third, he highlights an explosion in costs which he believes might have been avoided. Indeed, the $375,000 contract awarded in 2018 to the law firm Norton Rose Fulbright, now executed by Fasken Martineau DuMoulin, exploded by 1067%.
Contract management problem
According to the VG, this “highlights a problem of contractual management given that this modification cannot be qualified as reasonable and was foreseeable”. The VG analyzes that this significant increase is attributable to the fact that “the estimates made by City staff lack reliability”.
In fact, the sums allocated of $375,000 were not enough to cover legal fees for a full year since an additional expense of $4 million was authorized the following year, followed by another 4.8 million in 2020.
In other contracts, cost estimates produced by City staff have been less reliable than those produced by subcontractors. The differences can go up to more than 40%, notes the VG.
The mayor of Quebec, Bruno Marchand, pointed out in the followingnoon that inaccurate estimates do not mean additional costs, since sometimes the estimates are higher than the final cost.
For him, the report of the VG is positive. “Yes, there are things to improve but overall it is an excellent report for the Project Office and for the City. What the citizens of the City can remember is that they can be confident.”
Acquisitions
Also, glitches were identified in the land acquisition process, particularly in the accuracy of the plans the City had in its possession. “Of the 232 properties for which the Department of Major Projects had the lot plans in hand, 34 contained errors, 23 of which affected the plot plans of the urban technical networks.” This causes delays since the resumption of these plans takes time.
Despite the fact that the City of Quebec has authorized the expropriation for 17 properties, no expropriation procedure has been completed, he notes.
In addition, Mr. Samson considers that the provisions for risks are “sufficient in relation to the stage of progress of the project”. A reassessment by the VG of the costs of the project, estimated at nearly $4 billion, will be made at the end of the year.
For his part, the leader of the opposition, Claude Villeneuve, believes that the report does not present a “major scandal”. “Quebec is a city where the debt ratio has been well managed, where there are good financial practices.”
He is reassured by the fact that the underestimated contract is an exception. “The fact that we have a limited event like this shows that the rest is going very well,” he said. But he agrees that it is necessary to revise the ways of doing things in order to reduce the differences between the estimates and the final costs.
– With the collaboration of Jean-Luc Lavallée
