The new Dawson sewage treatment plant may go over budget because of contractual disputes, according to a disgruntled subcontractor.
On Dec. 6, the general contractor for the project, Vancouver-based Corix, terminated its subcontract with Dawson City’s Han Construction Ltd.
Han disputes that Corix had the right to take this step, said acting Han CEO John Wierda in a news release on Monday.
“Han intends to take all steps available to it to recover amounts due under the subcontract, as well as all losses suffered as a result of Corix’s repudiation of the subcontract,” he said.
Han, which is owned by the Tr’ondek Hwech’in First Nation, worked diligently to carry out its contractual obligations, said Wierda.
He blamed Corix’s “significant fast-track changes” to the design of the facility for cost increases and for the project being behind schedule.
Corix changed the project design at least three times, he said.
Most notable was the change from a wood structure to steel.
“The parties were unable to reach agreements on the value of changes to the work and Corix refused to pay the full amount of Han’s invoices, while at the same time claiming and receiving payment for the full amounts from the Yukon government, until Han made a claim to the Yukon government,” said Wierda in the release.
“Han had been attempting to reach settlements with Corix on amounts owing to it and other outstanding matters when Corix chose to terminate the subcontract,” he said.
“This is unfortunate as the result will almost certainly be higher project costs – including the costs of avoidable legal action.”
Neither side in the dispute has said how much money may be in question. But in October, Corix owed Han over $2 million, according to Gerry Innes, a subcontractor who supplied steel for the project.
“Corix is committed to delivering the wastewater treatment plant infrastructure to the Yukon government and the Dawson City community according to our contractual requirements,” said spokesperson Jack Touhey.
“Corix is taking the steps, which it believes are both warranted and necessary in order to effectively deliver the project in a timely manner.”
A lot of the work in Han’s contract has already been completed, Touhey told the News last week.
The company intends to manage subcontractors and get the rest of the job done itself.
Corix plans to have the facility up and running by June of next year.
“Due to the contractual nature of the issue we can’t comment or speculate, other than to say that we’re aware of it and that we ensure that all terms of the contract between Corix and the Yukon government are being upheld,” said Kendra Black, an official with the Department of Highways and Public Works.
In general, contracting regulations allow for a subcontractor to advise the territory that it is not being paid on government projects.
The government will then hold the unpaid amount of money claimed back from the general contractor’s progress payments and put it in a trust fund until the dispute is resolved, said Black.
“I can say that the Yukon government has required Corix to obtain a labour and material bond that ensures subcontractors to Corix are being paid,” she said.
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