It was almost a year ago, last November actually, when VANOC made its request to the federal and provincial governments for an additional $110 million to cover the rising capital costs of Olympic venues. And it took until August before Prime Minister Stephen Harper finally came to Vancouver and announced the federal government would put up its half of the additional money.
Why the nine-month delay in approving additional funding for a project when the two governments really didn’t have any choice in the matter? The federal government’s announcement last week that it wants its own audit of VANOC is a clue.
VANOC’s request for more funds was made when the previous federal government was ready to fall. It wasn’t until January that the Conservatives could form a government and review the request.
Both the feds and the province have representatives on the VANOC board, although the federal representatives are still all appointees of the previous Liberal government. But both governments wanted independent, arm’s length assessments of VANOC’s operations and its request before agreeing to put up another $55 million each. And the Conservatives wanted their own report, rather than partnering with the province, so two assessments were done. Both were made public last month and, with a third report produced by B.C.’s acting Auditor General, Arn van Iersel, the trio of papers raise a host of concerns.
The report for the federal government, the Due Diligence Review of the 2010 Winter Games Venue Program prepared by Pacific Liaicon and Associates Inc., a member of the SNC-Lavalin Group, is particularly damning. It found that most of the contingency included in the $580 million capital budget — about $100 million — had already been consumed. In fact, there was only about $13 million left in the contingency fund. “Our past experience in managing large projects is that the contingency starts coming into play in the construction and check-out stages of the project, not in the beginning of the conceptual engineering stage,” the authors wrote.
“All of the information we have reviewed seems to have lumped contingency and escalation together.”
At the time the report was published only three venues had completed or were close to completing their engineering — the UBC hockey arena, the Whistler Nordic Centre and the Whistler Sliding Centre.
The harshest criticism was reserved for the senior vice president venue construction, a position that the authors wrote, “…requires a person who has managed projects of similar magnitude and complexity and whose total focus would be in personally driving the design, engineering, procurement, construction, cost, schedule, safety and quality to completion.” They also made clear that a new senior vice president of construction should be appointed.