Keeyask cost, schedule back on track: Hydro

Hey there, time traveller!
This article was published 18/10/2018 (2016 days ago), so information in it may no longer be current.

Manitoba Hydro says its troubled Keeyask megaproject is back on track with the price tag it released in early 2017, signalling an end to perpetually ballooning cost estimates.

“The bleeding has been staunched, it appears,” said Byron Williams, a lawyer with the Public Interest Law Centre who represented the Consumers’ Association of Canada at Public Utilities Board (PUB) hearings.

On Friday, Hydro revealed to the Free Press it believes the Keeyask project will cost $8.7 billion, ruling out an independent review last year that said costs could rise to as much as $10.5 billion.

“The project is on track to meet its control budget of $8.7 billion,” spokesman Scott Powell wrote. “We are expecting the first turbine generator to be in service by October 2020, well ahead of the August 2021 target publicly announced in 2017.”

The 695-megawatt Keeyask Generating Station sits 725 kilometres north of Winnipeg, near Gillam.

Keeyask was originally estimated at $3.7 billion when the NDP government approved it in 2008. But its costs rose as construction stalled until 2014; that year, the PUB reported its estimate at $6.5 billion. It raised its estimate to $7.8 billion in September 2016.

The $8.7-billion estimate emerged in March 2017, but it was surpassed by Calgary consulting firm MGF Project Services, which said the project could balloon to as high as $10.5 billion if Hydro’s contractor didn’t ramp up its productivity.

It now appears the contractor has stepped up, with Powell saying the project’s construction is 60 per cent completed.

“We had a very good construction year, thanks to the tremendous effort of employees and contractors,” Powell wrote.

Williams says the stable estimate bolsters the PUB’s assessment for how much Manitobans ought to pay for hydro.

In April, the PUB granted Hydro a power-rate increase of 3.6 per cent, less than half the 7.9 per cent hike it had sought. Some business groups believed the higher rate hike would lower the impact of the debt rising if interest rates jumped.

The Crown corporation is carrying a debt of $19 billion, a figure that is expected to climb to about $25 billion in the next few years as Keeyask is completed.

— With files from Dan Lett

dylan.robertson@freepress.mb.ca