Dawson sewage facility leaves contractors fuming

Dawson City's new sewage treatment plant is in trouble. And it's not in operation yet. Corix, the Victoria-based company building the new plant, has stopped paying its main contractor, Dawson City's Han Construction.

Dawson City’s new sewage treatment plant is in trouble.

And it’s not in operation yet.

Corix, the Victoria-based company building the new plant, has stopped paying its main contractor, Dawson City’s Han Construction.

“Their bill is at more than $2 million already, and they haven’t been paid,” said Gerry Innes.

Innes got wind of the problem after his BC-based company, Vedder Steel, was subcontracted to supply the metal for the Dawson facility in August.

Since coming on board, Innes has watched Corix change the project design three times.

“The building was going to be wood, now it’s all steel,” he said.

Corix also chewed through five project managers, he said.

The latest project manager, Sean Twomey, refused an interview with the News, referring all questions to Highways and Public Works project manager Catherine Harwood.

“We can’t talk about contractual issues,” said Harwood.

There is a money dispute with Han, said Corix vice-president of public and government affairs Jack Touhey.

“We are in negotiations with (Han Construction) about the cost of their portion of the construction,” he said.

“There are some disputes about costs.”

Touhey wouldn’t get into details, because the negotiations are ongoing, he said.

In BC, Corix is known as “a problem child,” said Innes.

“People say they’re very difficult to get paid by.”

Innes had his lawyers write up a freedom of information file in order to look at Corix’s books.

“They should be on the public record, because it’s a government-funded project,” he said.

“And Corix is stiffing Han for a lot of money.”

On October 14, the Department of Highways and Public Works put out an online construction update for the Dawson wastewater facility.

“Structural steel for the building frame is arriving on site,” it says.

“When all the necessary pieces of steel are on site, steel erection will begin … this work is still slated to be complete in four to five weeks.”

But structural steel is no longer arriving on site.

A month ago, Innes got a call from Han Construction telling him to stop sending steel until Corix paid up.

Corix’s Touhey hadn’t heard the steel was on hold.

Not having the steel on site “may or may not impact the project’s schedule,” he said.

Han Construction was paying Vedder out of pocket for the steel, said Innes.

And Corix should have been paying Han, he said.

But it wasn’t.

Corix also owes Innes money for the design changes.

“But only $60,000 to $70,000,” he said.

“That’s small change in this business.”

Still, he’s not delivering any more steel until he sees the money.

It’s not Han that’s the problem, he said.

“Han paid me, they’re very good.”

Innes thinks Corix is taking advantage of Han Construction, which is owned by Tr’ondek Hwech’in First Nation.

“Corix played them,” he said.

“Han doesn’t know how to fight, it isn’t used to things like this.”

In Vancouver it would be another story, said Innes.

“We’d have Corix in binding arbitration within the week.”

Han Construction co-ordinator Don MacDonald “heard there were some issues” with Corix, but referred all money questions to Han employees Gary Wilson and Steve Spalding at the Dawson office.

Wilson did not return calls by press time.

Spalding, when reached, refused to talk about the Corix contract.

“I have nothing to add,” he said.

Han might be in arbitration, said Innes.

Ben’s Electrical, based in Whitehorse, has been wiring the underground segment of the treatment facility.

“Now we’re just waiting for Vedder Steel to get the building up,” said owner Ben Labelle.

Labelle didn’t want to get into the current Corix money mess.

“We’ve invoiced Corix and they’ve paid us,” he said.

“Everything is good, so far.”

Highways and Public Works awarded Corix the waste treatment contract in the spring of 2009.

Local Whitehorse company Ketza Construction also bid on the job.

Ketza’s bid came in at $16.5 million.

Corix bid $25 million.

In an unusual move, the Yukon government awarded the contract to the highest bidder – Corix.

Ketza proposed a traditional lagoon-style sewage treatment system.

There are more than 100 of them operating in Canada’s North, said Ketza owner Peter Densmore, at the time.

Corix proposed something completely different.

In Dawson, it promised to build a deep-shaft system, where sewage is stored and treated in underground tanks.

There are only a few in operation in Canada.

And most are failing.

One is in Virden, Manitoba, which has a population of just over 3,000.

“Our system is definitely not working for us,” Virden’s manager of works and utilities Cornie Peters told the News in 2009.

“It is in the process of being replaced.

“We are going to go with more conventional (sewage) treatment.”

Portage la Prairie also installed a deep-shaft system in the late 1970s.

But the Manitoba city has already replaced it.

“Our waste load was too much for it, so we decided to go with a more conventional system,” Portage la Prairie director of operations Kelly Braden told the News in 2009.

Homer, Alaska, has been operating a deep-shaft system since 1991.

Last year, it cost the town $524,000 in operations and maintenance.

That’s up from the previous year, which was $511,000.

It meets the city’s waste-effluent standards, said then Homer utility supervisor Jim Hobbs in 2009.

But Alaska’s standards are not as rigid as Canada’s.

Homer’s standards are based on a 30-miligram-per-litre-per-month ration.

Canada’s are set at 25.

“It’s a balancing act to meet the requirements, but not spend too much money on chemicals,” said Hobbs.

Corix was supposed to have the treatment plant completed by winter 2011.

In 2003, the Yukon territorial court ordered a new sewage plant be built after Dawson was charged, under the Fisheries Act, with pumping sewage into the Yukon River.

The court ordered the city to have a new plant built by December 31, 2004.

Since then, the city has asked for a number of extensions.

In August, it asked once again for an extension, moving the December 2011 deadline forward to spring.

That date has not been set by the judge yet, said Harwood.

But she expects the treatment facility to be up and running by spring.

It’s normal for big construction projects to not meet their initial deadlines, said Harwood.

“Weather and all sorts of things come into play.”

“We were hit by cold weather again,” said Touhey, explaining the delays.

“Living in the North, you know the challenges weather can pose.”

The project also ran into problems tying in the piping, which led to some delays, said Touhey.

The changes to the project design are Corix’s prerogative, added Harwood.

As long as the facility meets all the codes and specifications, including Dawson’s heritage bylaws, the Yukon government is happy.

And if Corix goes overbudget, it’s not the government’s problem, because it’s a “fixed-rate contract,” said Harwood.

“Corix has to deliver the product for that price.”

The Yukon government is chipping in an extra $187,000 on top of the fixed price for a heat pump to recycle heat from the waste water to warm the building, she said.

“This will recover costs over time, in heating bills.”

The Yukon government also has financial protection for subcontractors, said Harwood.

That means the government could end up paying Han Construction, if negotiations between Corix and Han turn sour.

Corix “better smarten up, or they’ll still be dumping crap in the river up there,” said Innes.

Contact Genesee Keevil at

gkeevil@yukon-news.com

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