Winnipeg turns to arbitration to claim compensation from construction contractor

Winnipeg turns to arbitration to claim compensation from construction contractor | Insurance Business Canada

Winnipeg turns to arbitration to claim compensation from construction contractor

The city of Winnipeg is considering using an arbitrator to claim more compensation for a botched police headquarters construction project.

The Graham Avenue police headquarters was built by repurposing Canada Post’s old downtown office and warehouse complex. Winnipeg’s council approved the purchase and renovation of the property in 2009 at a budget of $130 million. When it was finally completed in 2016, it cost taxpayers nearly $214 million (excluding some financing charges).

Mayor Brian Bowman said the city recently served notice to construction contractor Caspian Projects and Ottawa-based structural engineering consultant Adjeleian Allen Rubeli – both responsible for the building – that it intends to seek reparations for the project’s deficiencies.

The city, however, gave up its right to sue the contractor and/or the designer as part of a contract signed by the previous administration, Bowman explained.

“Arbitration, we are advised, is our only option for seeking compensation for deficiencies on the project. Our CAO has advised it is unusual for the city to have a contract in place that removes our ability to sue,” the mayor told reporters. “It is pretty clear to me that the best interests of the City of Winnipeg and taxpayers were not paramount by those responsible for entering the contract with Caspian.”

The mayor was addressing the media following an executive policy committee meeting on the matter, CBC News reported.

“It’s a significant amount of money we would like to recoup,” explained city chief administrative officer Doug McNeil, who would not disclose the amount. “Part of the arbitration process is it’s a private, confidential process. That’s why we prefer the lawsuit route, because it’s much more open and you can see what we’re doing.”

Since its completion, the project has been nothing but trouble for the city. An external audit report in 2014 deemed the project a white elephant, and its construction has been under RCMP investigation since December 2014.

The overall quality of the project’s construction was also brought into question; city officials had pointed out issues such as holding rooms with false ceilings, and vehicle ramps with insufficient headroom during the construction process. Even after the building was completed, other problems such as ventilation issues and leaks were identified by the city after it took possession of the property.


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