December 28, 2006

Politics

Contractors outraged at proposal

Ottawa councillor’s idea called ‘abuse of power’

KORKY KOROLUK

correspondent

OTTAWA

Senior construction industry spokespeople have reacted with outrage to a proposal by Ottawa Councillor Rick Chiarelli to prohibit firms engaged in lawsuits against the city from bidding on city projects.

“A total abuse of power,” said Clive Thurston, president of the Ontario General Contractors Association.

“The councillor is proposing to trample the legal rights of contractors,” said Bert Hendriks, chair of the Ottawa Construction Association.

Chiarelli has said he will present a motion to a mid-January meeting of the city’s economic affairs committee to keep any firm suing the city from bidding on other city projects.

If passed by the committee, the motion would eventually find its way to city council.

Unless or until the full council gives it approval, the idea remains simply a proposal.

Chiarelli mentioned the idea briefly during the recent debate that led up to the council decision to cancel a light-rail transit project that would have cost about $880 million.

One of the reasons the project was killed was that the city had not received the $200 million the federal government had promised.

It was being held up, the city was told, while the federal transport department examined a major change to the plan that council had made the week before.

A letter was apparently sent to a number of interested parties by Treasury Board President John Baird, saying the money would be later than the Dec. 14 deadline, but it would be forthcoming. The city says it received no such letter, nor did it receive a copy.

During the debate, council heard the project consortium, led by Siemens Canada, PCL Constructors and Dufferin Construction, had written to the city saying should the financial closing of the contract not take place as scheduled Dec. 14, it “will pursue any and all legal actions available to us.”

Hendriks said in a statement if the proposal were to be approved, the city would be holding “a heavy hammer” over the heads of companies that find themselves in dispute with the city and “would irreparably harm relations with the construction industry, and turn every city . . . project into an adversarial confrontation.”

“Somebody sure as hell dropped the ball.”

Clive Thurston, OGCA

Thurston said the fact the city never got written word that the money would be available, even if somewhat late, “smacks of incompetence on somebody’s part — whether it’s at the federal level or the city level, we don’t know.

“I find it incredible that on a project of this size, of this importance, that had not been taken care of.

“Somebody sure as hell dropped the ball.”

And, he added, he has seen no indication the city asked for a few more days for the financial closing, a practice “that’s not unheard of in the industry.”

Thurston said Chiarelli’s proposed policy would deny the industry its civil and rights.

“There are municipalities that have this clause,” he said in an interview.

“They have admitted to us in the past that it is meant to intimidate and force the majority of small and mid-sized contractors not to sue the city. And it works, because, unfortunately, the small and mid-sized contractors don’t have the resources to challenge such a bylaw or contract clause.

“They would rather go quietly into the night and take their losses, never knowing whether they were right or wrong on an issue simply because they’d been intimidated into keeping quiet.”

The proposal, he said, represents “an unwarranted interference in the economic relations between the city, the contractor and the construction industry.”

Chiarelli did not respond to a request for an interview. But in one published report, he pointed out that such a policy had been in effect in the city of Nepean during the time he was a councillor there.

Nepean has since been incorporated into the city of Ottawa, where Chiarelli recently won re-election as councillor.

Thurston expressed a worry that extends over the longer term.

The Siemens-PCL/Dufferin consortium was one of three that entered the competition to design and build the rail line.

Chiarelli’s proposal “shows a complete disrespect for the construction industry, and (if adopted) will drive people away from participating in other large projects. . . .”

“The consortium has done nothing wrong. They responded to a proposal, with a number of other consortia.

“They competed fairly. They won the competition. It was awarded to them. They were proceeding.”

He said the OGCA will “make all of its resources available to the consortium should they decide to challenge this.”

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