Castle Rock sells its asphalt business to Skookum

The territory could be back to having only one local asphalt provider soon and it’s raising concerns at the City of Whitehorse.

The territory could be back to having only one local asphalt provider soon and it’s raising concerns at the City of Whitehorse.

On Tuesday, Castle Rock Enterprises CEO Paul Gruner told the News the company’s asphalt division was to be sold to Skookum Asphalt Ltd.

The move would give Skookum a full monopoly over the asphalt business.

“It was just an opportunity to free up some cash and maximize the shareholder value,” Gruner said on Tuesday.

Castle Rock isn’t under any sort of financial distress, he said.

“We do from time to time look for opportunities for liquidity.”

Gruner is also the general manager of the Dakwakada Development Corporation, the for-profit entity owned by the Champagne and Aishihik First Nations.

The development corporation owns Castle Rock.

The actual sale is supposed to happen in July. It includes a deal to use the asphalt plant to complete the work Castle Rock had been contracted for before the sale.

The sale only includes the assets – the asphalt plant and related equipment.

“We’ll do what we can to reduce the impact [on employees],” he said.

Gruner noted a lot of the people employed by Castle Rock are seasonal workers.

“We scale up and down based on seasonality,” he said.

“We have full confidence Skookum will bring quality asphalt product.”

But at city council on Monday night, the issue of Skookum becoming the sole asphalt provider for the territory was raised.

Council was debating whether or not to approve a $213,000 contract to Castle Rock for resurfacing roads.

“Two bids were received… and the prices are lower than anticipated due to competitive market,” Coun. Roslyn Woodcock told city council.

“Administration plans to issue an additional tender for rural road upgrades to take advantage of competitive pricing and make use of the full amount allocated in budget.”

Coun. Samson Hartland asked what impact the sale would have.

“I’ve been in contact with them – it’s not going to affect anything,” Mayor Dan Curtis answered.

“They’re going to fulfill their contractual obligation with the city.”

But that competitive market the city wants to take advantage of isn’t going to be around for future tenders, Coun. Betty Irwin pointed out.

“In effect this really takes that competition out with Skookum taking over the asphalt division of Castle Rock,” she said.

‘We can’t take advantage of competitive bidding at this point, I’m curious to see what the next contracts will come in at.”

Back in October 2011 Castle Rock was granted permission to operate an asphalt plant at a quarry near Haeckel Hill.

Castle Rock’s entry in the asphalt market definitely made a difference, the city’s director of infrastructure and operations told the News today.

“They were quite competitive,” said Peter O’Blenes.

“That competition did drive prices down.”

He said the expectation is that prices would probably increase but that he was “hoping for the best.”

When asked to comment about it, Chris Simons, division manager at Skookum, expressed his surprise.

“Skookum has been in the territory for over 30 years providing paving services, we’ve always had a great relationship with the city and I expect that to continue,” he told the News on Tuesday.

“I don’t think their comments are justified.”

Contact Pierre Chauvin at

pierre.chauvin@yukon-news.com

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