Deh Cho Bridge Project

Audit Summary

Publication Date:
March 2011

Audit Office:
Office of the Auditor General of Canada

Link to full report:
http://www.oag-bvg.gc.ca/internet/docs/nwt_201103_e_34999.pdf

Objective: To determine whether the Government of the Northwest Territories (GNWT) had adequately managed the key risks associated with the Deh Cho Bridge project.
- Sub-objective #1: The Government of the NWT had adequately managed the risk of entering into a public-private partnership to build the Deh Cho Bridge.
- Sub-objective #2: The Department of Transportation had put in place an appropriate framework to manage the key risks associated with the quality schedule, scope, and cost of the Deh Cho Bridge project.

The Government of the NWT manages the risks of entering into a public-private partnership.
The Department of Transportation manages the key risks of the project

The project was not a public-private partnership. The Concession Agreement assigned most of the project risks to the GNWT and did not shift any significant risk to the private sector; risk sharing was anticipated when a P3 procurement strategy was selected.
Despite unresolved design issues between the Department and the Corporation, the GNWT authorized bridge construction to begin without having the assurance of a fully developed design. As a result, the risk to the project was significantly increased. Ultimately the inability to resolve design issues within the specified time frame resulted in the lenders declaring the Corporation to be in default and requesting the GNWT to assume the project debt.
The Department has a framework in place to manage the key risks, but there are weaknesses in the risk matrix it developed for the project—for example, some of the risk mitigation measures are too general to be useful. While quality assurance and quality control have increased since the Department took over the project, significant risks remain in the areas of the project’s schedule, scope, and cost. Although the Department has identified the need for a single engineer to sign off that the bridge as a whole meets the Canadian Highway Bridge Design Code, it has yet to determine how this will be accomplished.

For future major projects, the Government of the Northwest Territories should establish a senior project oversight committee early in the planning phase of a project. This committee, composed of individuals with considerable experience in managing major projects, should provide advice to the Government and, where relevant, the Legislative Assembly, on the steps required to develop a major project, and should act as a forum for discussing project objectives, risks, procurement, and other relevant matters.
The Department of Transportation should update the information contained in its risk matrix. It should provide more complete information on mitigation measures responding to potential risks.
The Department of Transportation should ensure that a single authority is identified to certify that the design and construction of the bridge meet the Canadian Highway Bridge Design Code. This certification should be obtained before the bridge is open to traffic.