Two out of three teams shortlisted to build the Valley Line West LRT expansion have backed out of the selection process, leaving the City of Edmonton to gauge interest from contractors over the next month and reopen bidding by the fall.
“We’re impacted by other people’s corporate decisions in this case,” said Bruce Ferguson, branch manager of LRT expansion and renewal. The city initially planned to move into the next stage of the proposal process next week.
On Monday, SNC-Lavalin announced a major corporate restructuring. As a part of that move, the Montreal-based company withdrew from bidding on major lump-sum infrastructure projects, including the Valley Line West LRT.
Ferguson said the second team, Urban Mobility Partners, withdrew its submission around two weeks ago because of a team member change, leaving only Flatiron/AECON/Dragados Valley Line West Joint Venture at the table.
While that one team could theoretically complete the project, which will run 14 kilometres from downtown to Lewis Farms, Ferguson said it’s not a great option.
“It’s not desired because we want to make sure that we’ve got as much competition as possible … to make sure we get the best value for Edmontonians,” he said.
Ferguson is confident there will be plenty of interest if bidding on the project is reopened.
“There are people from the industry … reaching out to us saying that they’re very interested in this project, that they want opportunities to do it,” he said.
“Our goal is to be able to get more teams to the table but we won’t really know until we reach out and engage the marketplace and understand if teams are able to form out there.”
Over the next couple of weeks the city will gauge interest from contractors before re-entering the procurement phase.
‘Blessing in disguise’
Coun. Andrew Knack called the setback a “blessing in disguise.”
When the shortlist was announced at the beginning of June, Knack said some of his constituents expressed concerns about SNC-Lavalin and “their track record.”
The engineering giant faces charges of fraud and corruption related to nearly $48 million in payments to Libyan government officials between 2001 and 2011.
Knack said qualified contractors who may have been tied up or waiting on other selections like Calgary’s Green Line LRT could be able to participate in the bid process this time around.
“So that may actually create more opportunities to get more interested parties and therefore ideally more competitive bids,” he said.
There’s always an ebb and flow in the infrastructure marketplace, Ferguson said, with contractors trying to match their availability to the timing of projects.
“There are often multiple projects on the street at the same time,” he said. “Therefore contractors have to decide which one they want to go after or who they partner with. And that changes on a project-by-project basis.”
Both Knack and Ferguson said construction on the project is still expected to begin by 2020, and EPCOR has already started relocating existing utilities to prepare for the build.
“A bit of a sidestep on this part of the procurement process but the project is going to continue,” Ferguson said.
After a contractor is chosen, the city expects construction of the project will take five to six years.