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The controversy that keeps giving

Much mud has been slung across the floor of the Yukon legislature over the transformation of Watson Lake’s half-built health centre into a…

Much mud has been slung across the floor of the Yukon legislature over the transformation of Watson Lake’s half-built health centre into a full-fledged hospital.

Sinkhole, fiasco, monument: these are some of the epithets used by the opposition. No wonder. The optics are certainly bad.

From the get-go, the opposition has two opportunities to allege nepotism: not only is the centre being built in Premier Dennis Fentie’s riding, but the contract to manage construction went to the father of a cabinet minister.

This is old news; work on the project started four years ago. But new life was breathed into old controversy this summer, when the government announced its intention to transform the incomplete $5-million health centre into a $25-million hospital.

The job to recast the shell of the health centre into a hospital won’t be easy. Elevator shafts, for instance, are too narrow for hospital purposes. And, in case it doesn’t look bad enough, mould has begun to form inside the structure.

Millions of tax dollars appear to have been wasted in the handling of the project. Important questions remain unanswered. Some have yet to be publicly asked.

All this has given Liberal Leader Arthur Mitchell plenty of excuses to revisit what he calls a “pet project of the premier in his riding.”

The work was sole-sourced, added Mitchell, salting the wound.

Fentie, never one to back down from a fight, waved around a handful of papers. These, he said, were proof contracts were publicly tendered.

“The members say this was sole-sourced,” he said. “The members are seriously challenged for credibility.”

So, who’s right? Was the work publicly tendered or sole-sourced?

Trick question: it was both.

A list of contracts tied to the project, compiled by the Liberals, shows a majority of the work had been sole-sourced. But this, and Fentie’s bundle of papers, are both misleading.

The Liberals leave out the year of 2007-8 — a year that reflects especially well on the government.

This is likely because by May of 2006, the opposition had extracted from Brad Cathers, who was then public works minister, a promise that “all the future areas of this project will be publicly tendered.” To its credit, the government apparently made good on that commitment.

That’s not to say the government did not sole-source millions in construction work. It did.

Take a $170,000 contract to manage construction, which was sole-sourced to a company owned by Ivan Raketti, the father of Elaine Taylor, Fentie’s environment minister.

But as the project progressed, the government, under fire from the opposition, became progressively better at tendering work.

A review of Yukon’s contract registry finds that, of all work tied to the Watson Lake project from 2003-4 to 2007-8, slightly more than half the $4.7 million worth of work was sole-sourced. The rest was tendered.

In an interview, Fentie said as much: that the Watson Lake project was “virtually split” between sole-source and tendered work. To date, he said $4.463 million has been spent. The incomplete shell is not yet closed to the elements.

That’s lower than the sum of work in the registry because of work that came in under cost, he said.

As for the bundle of papers that Fentie waved around? Didn’t Fentie suggest all work had been publicly tendered?

“I didn’t say it was all publicly tendered at all,” he said. “I simply pointed out there are public tenders in this project.”

He defended the sole-sourcing of projects early during work.

“Sometimes that happens,” he said. “For efficiency, expeditious process, moving things along. It happens all the time.”

Fentie also notes most big contracts were sole-sourced to Whitehorse firms, rather than to Watson Lake companies. This fact should discredit allegations of nepotism, he said.

Some work was sole-sourced to Watson Lake companies, such as Raketti’s, in order to ensure the community would benefit from the project, said Fentie.

“But the request came from the community,” he said. “There’s a lot of insinuations and allegations. The really sad part is these are unwarranted attacks on individuals, especially Mr. Raketti, who is no longer with us.”

Raketti died in May of 2006.

“The facts are, this is not favouritism. This is not an anomaly. Sole-sourcing has been going on all the time, and always has,” said Fentie.

That may be true, but the proportion of money given to sole-source contracts tied to the Watson Lake project, as compared to public tenders, is below par, when compared to the Yukon average.

In 2005-6, the Yukon commissioned $395.7 million worth of contracts. Of that, 64 per cent was publicly tendered, 31 per cent was sole sourced and five per cent was tendered by invitation.

In 2006-7, of $374.3 million in contracts, 58 per cent was publicly tendered, 36 per cent was sole-sourced and six per cent was tendered by invitation.

Granted, for a government that spends nearly $1 billion annually, a $5-million project is pennies. But the Watson Lake project has become more than that, now that the government wants to spend an additional $25 million to turn the building’s shell into a hospital.

The $25 million is an early estimate, and it does not include the cost of furnishing the facility.

So, how did we end up with a mould-coated shell of a building that is poorly suited to be turned into a hospital? And what is being done to prevent future projects from being botched, as the government prepares for its forthcoming splurge of infrastructure projects, which Fentie has proposed to get through the economic downturn?

The structure was supposed to be a multi-level care facility, which would provide care for elderly residents with high needs, such as Alzheimer’s disease, mental illness or later stages of multiple sclerosis, without having to move them away from family to Whitehorse.

The facility was to be attached to the old hospital in Watson Lake in order to provide care in a setting that felt more like a home than a hospital.

The Yukon Party promised to build such facilities for both Watson Lake and Dawson City during the last election. Since then, the Dawson facility has been put on ice.

Why Watson Lake and not Dawson City? Mitchell has asked; Fentie only gives smack-talk in response.

One needs to dig through old reports to find some justification for government’s decision.

A 2004 report suggests Watson Lake needs such a facility more than Dawson City because Dawson already has McDonald Lodge. But the lodge only offers light and medium care for elderly residents, rather than the higher level of care that would have been offered by a new facility.

And it’s never been explained why the Yukon Party has decided to only honour one of the two election promises it made to build these facilities. Fentie has brushed aside this question by saying his government’s priority is to help dig Dawson’s municipality out of debt.

Where is the government’s prioritized list of health infrastructure projects, and how did it set these priorities?

Such a plan is in the works, says Health Minister Glenn Hart. But the fact no plan, apparently, existed when the decision was made to put a hospital in Watson Lake does not inspire confidence, Mitchell notes.

More troubling, and less discussed, is how the government proceeded to build the care facility before fully costing the project. The government eventually concluded the facility was not worth building, but only after much of the facility was already built.

How did that happen?

In January of 2007, it became clear the existing plan would not work. A report found it would cost $6 million to bring the old hospital up to code. An additional $1.7 million would be required to shuffle hospital services into the new health centre during renovations. These costs sank the project. Rather than spend that much money on a renovation, the government decided to build a new hospital.

Why was the evaluation of the existing hospital in Watson Lake conducted only two years after construction on the new health centre had begun?

Had this cost analysis been done before ground was broken, it would have been clear then the hospital needed replacing. The shell of a health centre would never have been built.

And the government would not be in the awkward position it is today, trying to squeeze a hospital into a shell that was never intended to house such facilities.

Millions of tax dollars would likely have been saved by avoiding redundancies and costly complications.

Who screwed up? It won’t be easy to find out. Both health and public works portfolios have been shuffled since the project began.

Of course, the man on top remains the same: Fentie.

But many of these last questions have yet to be directed at him in the House, let alone be answered.

Contact John Thompson at