Exclusive: Evergreen Line board pondered SNC Lavalin's legal troubles

Tue Jan 8, 2013 11:00am PST

Corruption allegations swirling around the company hired to design, build and finance the Evergreen Line rapid transit project were discussed at a meeting of the project board last June.

But the five-member board heard the onus was on SNC-Lavalin to disclose any changes in its business finances.

The special June 26, 2012, meeting was more than three months before the Montreal-based engineering and construction giant was announced as the successful proponent for the $1.4 billion project. Amanda Farrell, executive project director and vice-president of Partnerships BC, gave a procurement update by phone, according to the heavily censored minutes obtained by Business in Vancouver through Freedom of Information.

The only visible paragraph on the 16-pages of minutes said: "The chair asked for an update on recent press reports on SNC and whether there would be an impact on the procurement process. The project team confirmed that SNC is required to disclose any material changes to their financial situation under the terms of the RFP."

The minutes do not show what, if any, action the board took to protect taxpayer interests.

The meeting was held the day after two former SNC Lavalin executives were charged in Toronto with violating the Corruption of Foreign Officials Act in connection to a bridge project in Bangladesh. A preliminary hearing is set for April 8-19, 2013. Late last November, ex-CEO Pierre Duhaime was arrested in Quebec on charges of fraud, conspiracy to commit fraud and use of false documents. SNC-Lavalin is also under fire for projects in Libya during the rule of dictator Moammar Gadhafi and charges of kickbacks at the McGill University Health Centre.

SNC-Lavalin was announced by the B.C. government as the preferred bidder on October 4, 2012. Talking points prepared for Transport Minister Mary Polak on October 3, 2012, included answers to questions that were anticipated from reporters.

One questions expected to be asked was, "How can you assure taxpayers that SNC-Lavalin Inc. is a reputable business partner in light of the corruption charges and other issues the company has faced over the past year?"

The prepared reply was: "SNC-Lavalin is a Canadian company with a long-standing, successful history of partnering in major infrastructure projects in B.C.

"Our responsibility is to do extensive due diligence, and we are confident we have selected a primary contractor that can deliver the project on-time and on-budget."

If pressed, Polak was to say:

"I can't comment on what is happening elsewhere with SNC. What I can say is that SNC has an excellent track record of work done in B.C.

"In the event that the primary contractor defaults, lenders can replace the primary contractor; in addition, the government of B.C. has the right to step in to subcontract the work to ensure the project is complete.

"The contract includes safeguards against the involvement of restricted persons (people whose standing or activities could compromise the reputation or integrity of the government of B.C.)."

SNC-Lavalin's B.C. work includes the Sea-to-Sky Highway Project, Canada Line and Bill Bennett Bridge in Kelowna. Chairman Gwyn Morgan headed Premier Christy Clark's transition team after she won the B.C. Liberal leadership in 2011.

The Evergreen Line is scheduled to be open for service in summer 2016 and is funded by the federal government ($417 million), B.C. ($583 million) and TransLink ($400 million).

Sarah Clark, project director and CEO of Partnerships BC, SkyTrain president Fred Cummings, TransLink CEO Ian Jarvis, transportation deputy minister Grant Main and transportation assistant deputy minister Kevin Richter are on the five-member project board.

The transport ministry document was the only one released after a request to the transport, finance and justice ministries seeking reports, evaluations, assessments and audits about SNC-Lavalin's ability to take on the project amid civil and criminal actions related to domestic and international corruption allegations.


Tags: Bill Bennett, Christy Clark, Gwyn Morgan, business finance, Vancouver, TransLink, transport, federal government, engineering

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