Cancelling Site C Avoids Possible Cost Overruns, at Less Cost than Mothballing
Cancelling BC Hydro’s Site C reservoir, dam, and turbine complex on the Peace River would cost British Columbians C$1.2 billion. But that would still be cheaper than putting the troubled project on hold, and could save taxpayers from “significant” cost overruns on a project already priced at $8.8 billion, DeSmog.ca reports, citing a review by Deloitte LLP.
The auditing firm reached the conclusion in a report commissioned by the B.C. Utilities Commission as part of the first independent institutional review of Site C, ordered earlier this year by the province’s new NDP government.
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According to Deloitte, cancelling Site C would cost approximately $1.2 billion—less than half BC Hydro’s estimate. “Suspending construction until 2025 would cost $1.4 billion.”
Deloitte also observed that the 2019 target for completion of a critical sub-contract—constructing enormous diversion tunnels to carry the Peace River’s waters around the planned dam construction site—is “at considerable risk.” A one-year delay in completing the tunnels would add 10% to Site C’s cost, the report calculates. “A delay of more than one year will boost the project’s price tag by 20 to 50%.”
The auditors point out that other Canadian hydro projects have also come in 55% to 90% over budget. Former BC Hydro CEO Mark Eliesen made the same point last month, urging his former utility to walk away from what he described as a “reckless” and “irresponsible” investment.