The Yukon Hospital Corporation is distancing itself from Dowland Contracting and saying it did all it could to manage a difficult situation with the Watson Lake and Dawson City hospital projects.
Dowland is the general contractor for the construction projects, which are both over budget, behind schedule and facing a number of lawsuits by subcontractors.
“What happened was totally unforeseen. Nobody could have anticipated or expected that. All that we can tell you is that they defaulted with us in the contractual agreement. Anything about the company, Dowland, you would have to speak to Dowland,” said hospital corporation chair Craig Tuton.
Dowland Contracting has repeatedly refused to comment on its involvement with the hospital projects.
“It’s created a lot of insecurity amongst all of the sub-trades as well as everyone involved. But it’s here. It happened, and we have no choice but to deal with it,” said Tuton.
When asked what went wrong, Tuton said, “Let’s look at what went right. Both projects are completed to over 90 per cent. Obviously we went through a process that was a good process, our contracting bid process. Dowland was the low bidder on both projects. They had a lot of experience building big projects.”
As soon as the hospital corporation was told that Dowland wasn’t paying its subcontractors, the corporation engaged the bonding company, Intact Insurance, to handle the liability and take over the projects.
“In the event that the contract defaults, the bonds are in place to make sure that the contract is fulfilled, the project is built and all the sub-trades get paid,” said Tuton.
TSL Construction has been hired by Intact as the new construction manager on the projects, and is working with subcontractors to see the projects through to completion.
Tuton said that subcontractors are getting paid again, money is flowing and the workers are back to work on both job sites.
“We reacted as quickly as we could under all the circumstances that were presented to us. We have committed, as we have right from the start, to a timely and on-budget completion.
But the projects are neither on time nor on budget. Earlier this winter, the auditor general slammed the Yukon government and the hospital corporation for mismanaging construction projects that it couldn’t prove were even necessary to begin with.
Tuton said that as of now the Watson Lake hospital is expected to open this summer, with the Dawson City facility following suit in the fall. The Watson Lake hospital was originally slated to be done by this May, while Dawson City’s hospital was supposed to be complete by last autumn.
Hospital corporation CEO Jason Bilsky said that the current total cost for each project is $26.8 million for Watson Lake and $30.9 million for Dawson City.
That’s up by a total of $3.7 million from what the auditor general reported in February, and by $9 million from the original budgets of $22.2 million and $24.6 million, respectively.
Bilsky said the increase is due to some change orders on the projects, as well as the cost of installing hospital equipment, neither of which were included in the auditor general’s report.
Tuton defended the government’s decision to spent $27 million from its 2013-14 budget to help pay down the corporation’s debt. Both hospital buildings are being financed with a bank loan.
“The Yukon government made a very conscious decision – a business decision I might add – to pay down some of the debt that was owing. This is a reflection of the government deciding what the best use of their surplus dollars would be.
“I want to be very clear that the corporation has never been concerned about its ability to service the flow or reduce the amount of debt that we have,” Tuton said.
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