The price tag for the federally-owned Trans Mountain pipeline expansion has ballooned to more than $17 billion, en route to a final cost that could hit $20 billion, and project completion has been delayed to 2023 or 2024, according to a new analysis published late Thursday.
“Ottawa purchased the pipeline almost four years ago from Kinder Morgan Canada for C$4.4 billion after it appeared the private owners were set to walk away from the expansion as it faced a series of hurdles to be built by late 2020,” recalls Calgary Herald columnist Chris Varcoe, writing in the National Post. “At the time, the project’s price tag was pegged at $7.4 billion, but soon moved higher. It climbed to $12.6 billion in early 2020 and is headed up again.”
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Even before this latest cost overrun, campaigners at Coast Protectors were petitioning the federal government to cut its losses on the project.
“Trans Mountain recently admitted the cost of construction will be significantly higher, yet it refuses to say how much more the new pipeline will cost Canadian taxpayers beyond the last updated price of $12.6 billion—updated two years ago, before a global pandemic,” the petition site states. “Trans Mountain also refuses to update its construction timeline, though it is clear from sworn legal documents and Trans Mountain’s own construction reports that the pipeline cannot be built on time. More delays mean more costs to Canadians.”
Varcoe’s unnamed sources blame the cost increase on construction interruptions due to severe weather and the COVID-19 pandemic, and they stress the numbers aren’t official. “At the end of the day, it all needs to be approved by the government before it’s a real number, so who knows how it might tweak around,” said one insider.
Coast Protectors also cites “shoddy work by contractors” and environmental violations as factors that have slowed down the project.
Officials with the federal government and Crown-owned Trans Mountain Corporation had no comment on the National Post report. “At this time, we have no update to the cost or overall schedule of the project,” TMX told Varcoe in a statement.
Hal Kvisle, a fossil legend and former pipeline CEO who now sits on the boards of two Canadian oil producers, said the cost overrun will ultimately translate into higher charges for fossil companies that use the pipeline to transport their product. “I don’t know that the [construction] costs will exceed $20 billion, but it will be heading up towards that,” he said. “And most people now are thinking it will be done by the end of 2023, or maybe a little bit into 2024.”
But a lineup of fossil executives told Varcoe they were neither surprised nor concerned about the cost overrun. Chris Bloomer, former CEO of the now-defunct Canadian Energy Pipeline Association, said the cost hike shouldn’t make it harder for the Trudeau government to sell off the pipeline.
“It will attract a lot of interest,” he said. “This is a situation where costs have gone up, but the shippers are still committed.”
I would like to know what we are paying in monthly interest charges on the cost of borrowing and building this misguided pipeline purchase, and how much money we are getting monthly from the current line.
I would also like to know if the former finance minister, Bill Morneau, who was instrumental in the purchase of this pipeline derived any benefits from his involvement.
I would also like to know why the government retained former Enron/Kinder Morgan executive, Ian Anderson to be CEO of TML.
I realize that our PM Trudeau is easily influenced by corporate control, as evidenced by the SNC Lavalin /Jody Wilson Raybould affair but what else would motivate him to accept such a purchase without H of C discussion.
The biggest mistake for JT….and the reason I cannot vote for him ever again….and did not in the last election 4.5BILLION ON A PIPELIBE in a declared climate change crisis……hugh double standard. HE MUST STOP PROPPING UP THE OIL AND GAS CORPORATIONS…..really foolish political move. HOWEVER HE REMAINS BETTER THAN THE CONSERVATIVES who would have that pipeline up and running. IT appears NDP might have been the better choice.