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Tramway contracts: Unreliable estimates

Tramway contracts: Unreliable estimates

Quebec City’s auditor general notes that there is an administrative problem in awarding one of the three largest contracts for the tram line, due to unreliable estimates.

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Quebec City’s Auditor General, Michel Samson, released his annual progress report on the tramway project on Tuesday. Consider several aspects, including contract management. Among the tram line’s three largest contracts, he noted that managing the additional expenses in those awarded to the Inov and Sistra Design Canada trams are “appropriate.”

But for the third, it highlights an explosion in costs that he believes could have been avoided. In fact, the $375,000 contract awarded in 2018 to law firm Norton Rose Fulbright, now concluded by Vaskin Martineau Dumoulin, exploded 1067%.

Contract management problem

According to the AG, this “highlights a contractual management issue as this change cannot be described as reasonable and was foreseen”. VG analyzes that this significant increase is attributable to the fact that “estimates given by city employees lack reliability”.

In fact, the $375,000 allocated wasn’t enough to cover legal fees for an entire year, as an additional $4 million in expenses was approved the following year, followed by another $4.8 million in 2020.

In other contracts, cost estimates provided by city employees were less reliable than those provided by subcontractors. Differences can rise to more than 40%, VG notes.

Quebec Mayor Bruno Marchand noted in the afternoon that inaccurate estimates do not mean additional costs, as estimates are sometimes higher than the final cost.

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For him, the VG report is positive. “Yes, there are things to improve, but overall this is an excellent report for the project office and the city. What the citizens of the city can remember is that they can be confident in themselves.”

acquisitions

Some loopholes also appeared in the land acquisition process, notably in the accuracy of the schemes they held. Of the 232 properties that the Department of Major Projects had on hand plot plans, 34 contained errors, 23 of which affected the plot plans of urban art networks. This causes delays because it takes time for these plans to resume.

Despite the fact that Quebec City has authorized the confiscation of 17 properties, the confiscation procedures have not yet been completed, he notes.

In addition, Mr. Samson considers the risk provisions to be “adequate with respect to the project’s progression stage”. A reassessment by AG of the project’s costs, estimated at approximately $4 billion, will be carried out at the end of the year.

For his part, opposition leader Claude Villeneuve believes that the report does not represent a “major scandal”. “Quebec is a city where the debt ratio is well managed, where there are good financial practices.”

He was reassured by the fact that the understated contract was 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 review the ways things are done to reduce differences between estimates and final costs.

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In collaboration with Jean-Luc Lavalle