The contractor responsible for building Montreal’s two organic waste treatment centres has “mobilized” crews to resume construction of the facilities, where work has been at a standstill since mid-July, a civil service director informed city council on Tuesday.
“There was today a remobilization of crews on the two work sites. We confirm it,” Sophie Lalonde, director of Montreal’s building management and planning department, told the members of council at a special meeting that had been called at the behest of opposition party Ensemble Montréal.
“It’s positive. There’s a spirit of collaboration and co-operation in the current context.”
As reported in September, construction of a much-delayed composting centre in St-Laurent borough and a biomethanation plant in Montreal East was abruptly halted on July 15 when employees of the construction firm subcontracted by the city’s entrepreneur walked off the job in a dispute with the entrepreneur.
The entrepreneur, Veolia Group, has two contracts with the city worth $337 million combined to build, maintain and operate the facilities that will treat Montrealers’ organic waste. The two contracts were awarded to Suez Canada Waste Services in 2019 at triple their initial estimate and after more than a decade of delays.
French transnational Veolia Group acquired Suez earlier this year and now has the contracts for the two facilities.
Construction of the Montreal East biomethanation plant is 50-per-cent completed, while the St-Laurent composting centre is 90-per-cent completed, according to the city.
Lalonde, who answered councillors’ questions at a plenary held in council chambers, said it’s too soon to say when the facilities can now be expected to open.
Veolia informed the city last week that it was getting work moving again on both construction sites, but the work is limited in scope, she said. For example, the St-Laurent composting centre isn’t hooked up to Hydro-Québec’s network yet, so work in the coming weeks will consist of winterizing the facility and installing temporary heating, she said.
Before all work halted this summer, the composting centre was supposed to be operational in December 2020, but that date was pushed to August 2021 and then to this fall. The biomethanation plant was also initially supposed to open in December 2020.
Veolia and its principal subcontractor, EBC, are engaged in a dispute over costs, but the dispute and the contract linking them doesn’t concern Montreal, Lalonde said. As with any “turnkey” project, the city’s contract with Veolia binds the entrepreneur to ensure the deadlines and specifications are met, and on budget, she said.
However, Lalonde and her department also revealed at the plenary that Veolia is also demanding more money from the city.
On July 26, 11 days after EBC workers walked off the construction sites, Veolia demanded more money from the city to cover additional labour costs and material and equipment costs due to the combined impact of the pandemic, Russia’s war in Ukraine, factory shutdowns in China due to COVID-19, higher oil prices and a shortage of labour because of all the infrastructure projects in Quebec.
While the extra amount that Veolia is demanding from the city wasn’t made clear at the council meeting, Lalonde’s presentation said Veolia had told the city in July that it had extended $32 million to EBC to cover “additional costs” and wasn’t able to finance anymore.
However, Lalonde said the city isn’t compelled to pay the contractor extra because prices have risen. A turnkey contract, she said, “foresees the transfer of risk to a third party.” She added that the burden of respecting the contract is on the entrepreneur.
The city and Veolia plan more discussions, Lalonde added. The city then had to decide whether any of the entrepreneur’s financial demands relate to problems at the work sites that were not foreseen in the contracts and are therefore legitimate, she said.
“It’s not a question of negotiating,” Lalonde said.
A second plenary was held at the meeting to question civil servants about the city’s problems at its recycling sorting centre in Lachine. City council voted in September to cancel the city’s contract with Services Ricova Inc. following reports that bales of contaminated recyclable material were accumulating as high as the sprinkler system at the Lachine sorting centre. Ricova warned the city that it would stop accepting recyclable waste collected through weekly curbside pickup because the company’s market for selling the material overseas and locally had disintegrated.
Mayor Valérie Plante’s administration plans to transfer the operations to a non-profit company, Société VIA.
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