North Battleford hospital delay costs P3 vendor more than $1.25M in penalties

A construction delay at the new Saskatchewan Hospital North Battleford could cost the builder more than $2 million but it won't cost taxpayers, says the minister responsible for SaskBuilds.

The vendor involved with a public-private partnership to build the new North Battleford hospital will not be able to meet its June 1 target for completion, the government said Tuesday.

The vendor, Access Prairies Partnership (APP), is expecting a two- to three-month delay due to a subcontractor not being able to deliver according to the schedule. APP is a consortium that includes six companies.

According to the public-private partnership model, any delay-related cost will be the responsibility of APP. The private-sector partners assume the responsibility for all risk and costs to build on time and on budget.

David Marit, the minister responsible for SaskBuilds — the Crown agency responsible for overseeing the province's public-private partnerships – said the penalty to the vendor is approximately $1.25 million per month.

"We are [of] the understanding that they have hired extra staff and they are working night shifts to try and get it back on track. Obviously every delay is costing them money also, so they want to get this resolved as quick as possible," Marit said.

"There's no added cost to the taxpayers," Marit said.

The minister said he is confident the hospital will be completed properly because of the requirement for the proponent to cover a 30-year maintenance contract.

"When we get the hospital back in 30 years it's going to be in like-new condition. There are too many i's dotted and t's crossed that this contract is pretty well iron-clad."

Project history

The construction of the $400-million Saskatchewan Hospital North Battleford began in 2015. The 284-bed mental health hospital will include 96 secure beds to be used by incarcerated patients. It will replace Saskatchewan Hospital, which was built in 1913. 

The new facility suffered some setbacks during construction. Last October, the builder was forced to tear down exterior bricks and cladding to remove and replace faulty insulation in the walls.

Carillion PLC is one of the six companies in APP. It was to handle the 30-year maintenance of the hospital, but in January it went into liquidation. APP was tasked with finding a replacement, and Marit said that has been taken care of.