Documents obtained by The Narwhal reveal numbered companies and BC Liberal donors are among 38 companies awarded lucrative contracts without a competitive tender process — a practice that could be in violation of a western Canada trade agreement

BC Hydro granted by far the largest Site C dam direct award contract to a construction company belonging to McLeod Lake Indian Band, the Treaty 8 member that has spoken out widely in support of the project, according to documents The Narwhal obtained through a Freedom of Information (FOI) request.

Duz Cho Construction, a Chetwynd-based company with roots in the oil patch and mining industry, received a $29.5 million direct contract for “site preparation” work in 2016 on the Peace River’s south bank, according to the documents.

The contract was among 38 Site C project direct award contracts worth close to $90 million that BC Hydro granted from March 2016 to October 2018, including contracts to numbered companies, the documents show.

Direct award contracts allow BC Hydro and other public bodies to decide which companies or consultants get contracts, instead of going through a more transparent and competitive tender process.

Four companies that donated to the BC Liberal Party were awarded contracts totalling $11.5 million, while an oil and gas corporation that owns an inactive gas well in the Site C dam construction zone was awarded almost $1 million from BC Hydro to permanently cap the well.

Dermod Travis, executive director of Integrity BC, a non-partisan organization working to ensure integrity and accountability, pointed to Thursday’s far-reaching Supreme Court of Canada Redwater decision that energy companies — and not governments or regulators — must pay to clean up their abandoned wells.

“When it comes to abandoned wells the people who should pay for the clean-up and make sure it’s safe and secure are the people who made the wells in the first place and we shouldn’t be paying to clean up their mess,” Travis said in an interview.

The names of an additional 10 direct award recipients were redacted from the FOI response on the grounds that disclosure would be harmful to the financial or economic interests of BC Hydro or the B.C. government. (The Narwhal has requested that the Office of the Information and Privacy Commissioner review BC Hydro’s decision to keep those 10 recipients and the amount of public money they received secret.)

Travis said no government body should be able to withhold the names of companies receiving public money.

BC Hydro is already obliged to disclose an annual list of every contract it awards, Travis pointed out, although that list is not broken down by project.

“I don’t know what they’re trying to gain by this except continue to make themselves look like this secret club.”

Numbered companies: ‘you have no idea who it is’

Travis also said he was troubled by five contracts, worth a total of $15.8 million, that BC Hydro awarded directly to three different numbered companies either for “river road remediation and sediment control” or for the Site C shuttle service.

The shuttle meets workers that BC Hydro flies in and out of the Fort St. John airport on chartered planes or commercial flights and provides “Site C leisure” buses to transport workers to activities.

Numbered companies receiving public money should have their ownership clearly identified, Travis said, noting that transparency is especially important in light of the unfolding expenditure scandal at the B.C. Legislature.

“You have no idea who it is, who owns the company. The idea of hiding behind a numbered company automatically causes the public to believe there’s something fishy. A government, particularly in today’s day and age, needs to go out of its way to avoid the public thinking that something is fishy.”

The information about Site C project direct award contracts was released to The Narwhal as BC Hydro goes to court seeking to overturn an order from B.C. Office of the Information and Privacy Commissioner that compels the public utility to release the names of employees who adjudicate lucrative Site C project procurement proposals.

The list of direct award contracts released in the FOI response includes:

$3.8 million to Tracker Contracting Ltd., a road and lease construction company based in Fort St. John that donated to the BC Liberal Party and received three separate direct award contracts.

$934,476 to CQ Energy Canada Resources for “Site C Wellbore Lowering,” to seal an inactive gas well near the dam site that is owned by the company.

$1.28 million to Ecora Engineering & Resource Group, a Prince George-based donor to the BC Liberal Party , for fish stranding and monitoring services. The Peace River is home to 32 fish species, including four species vulnerable to extinction, and waters need to be lowered and diverted through tunnels to allow for dam construction, leaving some fish stranded.

$6.1 million to Victoria-based AON Reed Stenhouse, a donor to the BC Liberal Party , for professional liability insurance.

$1.9 million to Washington state-based M Pauletto and Associates LLC, an expert in roller-compacted cement dams.

$195,000 to the U.K.-based company DamSolve for the appointment of Peter Mason to the Site C Technical Advisory Board . Mason, who is listed as DamSolve’s technical director, dams and hydropower, joined the advisory board in 2016, according to one BC Hydro report.

$500,000 to Xpera Risk Mitigation, the Coquitlam-based private investigation company that monitored Peace Valley farmers and First Nations members who in January 2016 set up a winter camp in an old-growth forest on Crown land, in the path of clear-cutting for Site C. Six of the campers were subsequently named in an unprecedented — and on-going — civil law suit launched by BC Hydro that alleges conspiracy, trespass, intimidation and intentionally interfering with economic relations by unlawful means, and sues the campers for damages.

More than $1 million to a company called TE Little Consulting Ltd., in two contracts for unspecified services as an “independent engineer.”

$450,000 to Dynamic Isolation Systems Ltd., a Nevada-based company that bills itself as the “world leader in seismic protection.”

$2.9 million to Canadian National Railway Co. for a railway siding.

$228,000 to Calgary-based oil and gas company Canadian Natural Resources Ltd. as a cost share for a bridge replacement.

$1.65 million to Victoria-based RWDI Air Inc. for “air quality, climate & noise services.”

‘When you have a closed shop you have higher prices’

Travis said most of the direct award contracts should have gone out to tender.

The New West Partnership Trade Agreement among Canada’s western provinces mandates that any services or construction contract greater than $100,000 should be issued through open tender unless a public agency can prove an urgent or specialized need.

BC Hydro’s FOI response was titled, “Direct Award Allowed under New West Partnership Agreement.”

But Travis said BC Hydro “has an obligation” to explain how each of those direct award contracts meet conditions set out in the partnership trade agreement.

“I cannot understand why BC Hydro would not put it to tender so that all the companies potentially eligible to bid would bid and BC Hydro would be able to choose the best value for the contract awards. Without knowing what their potential justification for it is, it obviously raises red flags, particularly given the state of the project at this point.”

The price tag for Site C — announced as a $6.6 billion project in 2010 — soared to $10.7 billion at the end of 2017, just two years into the nine-year construction project.

“The idea that you’re now direct awarding contracts and not going out and trying to get the best price is somewhat of an insult to the people who are going to have to pick up the bill,” Travis said.

“The province has been for too many years a closed shop when it comes to infrastructure projects. And when you have a closed shop you have higher prices.”

First Nations with signed benefits agreements among recipients

Other Treaty 8 First Nations also figure prominently in the direct award contracts.

BC Hydro granted contracts to companies connected to three other B.C. Treaty 8 First Nations that have signed Site C impact and benefits agreements with the public utility.

Those nations have not spoken out publicly in favour of the Site C dam, which will flood their traditional territory, eliminate prime hunting and trapping grounds, and contaminate bull trout and other fish in the Peace River and its tributaries with methylmercury.

Halfway River International was awarded a $13.3 million contract as a “Site C Health Clinic Provider,” while Halfway River IDL Ltd. Partnership received $3.5 million for a grading and paving contract. Both companies are part of the Halfway River group.

Doig River Timber Ltd. received $357,000 for “north bank grinding.” Paul Paquette & Sons Contracting, a company owned by Saulteau First Nations members, was awarded one contract for $1.9 million and another for $897,206 for “clearing” work on both banks of the Peace River.

Blueberry River First Nation, whose treaty rights legal case is on hold pending negotiations with the B.C. government, was awarded a $496,000 contract for “Site C Wildlife Mitigation Structures Construction.”

The Twin Sisters Native Plants Nursery, run by the Saulteau First Nations and West Moberly First Nations, was awarded $618,000 for seed supply and delivery.

West Moberly First Nations and Prophet River First Nation have filed civil actions claiming that Site C, along with two other dams on the Peace River, unjustifiably infringes on their constitutionally protected treaty rights.

The question of whether the Site C dam violates treaty rights has never been tested in the courts.

The list of direct award contracts in the FOI response include another $12.1 million that BC Hydro paid to other arms of the B.C. government for Site C permits and to meet other requirements, as well as money it paid to municipalities negatively affected by the project.

Payments include:

$11.1 million to the city of Fort St. John

$960,000 to the district of Hudson’s Hope, the community most affected by the Site C dam. With a population of 1,000, the district will lose 97 properties to the Site C reservoir and the relocation of a provincial highway for the dam, as well as its water intake, pumping station and treatment plant.

$235,000 to the Minister of Finance for major amendments to Site C’s environmental assessment certificate, including a new design for the dam’s generating station and spillways and new bridge designs over two Peace River tributaries that will be inundated by the reservoir.

$834,700 to government ministries for air quality auditing, RCMP traffic enforcement, stumpage fees and field inspection fees.

Details of Site C oversight body ‘remain confidential’

An e-mailed statement from B.C.’s energy ministry said the Site C project’s “cost-to-complete” remained at $10.7 billion as of January 2019.

The statement came after BC Hydro’s latest quarterly Site C “progress report” to the B.C. Utilities Commission listed seven out of 12 areas pertaining to the project’s status as cause for “some concerns but in control,” including the project’s overall health, its schedule and cost.

The energy ministry e-mail also said that the government has not yet determined if the B.C. public will be privy to reporting from the Site C Project Assurance Board, established by the NDP government in January 2018 to ensure the project stays on time and within its revised budget.

“Until that decision is made, minutes and reports of the board remain confidential,” the ministry told The Narwhal.

Last year, an international hydro dam construction expert described the high level of confidentiality surrounding the Site C project as “extraordinary” and said he has never encountered such secrecy during his five decades designing, developing and managing large hydroelectric projects, including in China.