Yukon gov't sues builder of Dawson City's troubled sewage treatment plant

Four years, $27 million, and a whole lot of headaches later, the Yukon government wants its money back.

The territory is suing B.C.-based contractor Corix Utilities, claiming the sewage treatment plant it built in Dawson City is, essentially, a lemon.

Documents filed on Friday in Yukon Supreme Court say the plant has failed to function properly, and continues to fail.

The allegations have not been proven in court.

The government is seeking $39.5 million in compensation — $27 million to cover the costs paid to Corix, plus a $12.5 million security bond Corix posted with its insurer.

Corix Utilities won the design-build contract in 2009 and the facility was up and running in late 2012. The problems began almost immediately, with cost overruns and construction delays.

After its first year of operation, the facility was failing to meet water quality standards and the town of Dawson City refused to take over operation of the plant, as had been planned.

That forced the Yukon government to maintain ownership of the plant, until Dawson was willing and able to take it over. Last year, the territory realized that was never going to happen and assumed permanent ownership of the plant.

The government has said the sewage treatment plant is still not meeting the discharge standards of its water license. Operation costs are also as much as seven times higher than what was originally promised by Corix.