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Winnipeg Airport Authority sued for cost overruns

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by Myron Love

Steve Smith says that he is proud of the work that his company, Ellis-Don Corp. did in constructing the new $585 million James A. Richardson International Airport terminal building.

Steve Smith says that he is proud of the work that his company, Ellis-Don Corp. did in constructing the new $585 million James A. Richardson International Airport terminal building.

“The new terminal is a first-class building,” said the Ellis-Don spokesperson.

“It is a real landmark for Winnipeg, Manitoba and Canada as a whole.”

Barry Rempel, the Winnipeg Airport Authority’s CEO, is also pleased with how the new terminal building – which officially opened on Oct. 31 - has turned out.

“We are really proud of our team,” he said. “This is among the most energy-efficient buildings in the world for its size. The opening was flawless. All systems are working.”<0x000A> Despite Rempel’s and Smith’s positive comments about the new terminal building, there remains the little matter of who is going to be footing the bill for the design flaws and cost overruns that delayed the terminal building’s completion by almost two years.

That is a matter that is about to be decided by the courts.

In mid-November, Ellis-Don, the general contractor on the project, filed a civil suit against the Winnipeg Airport Authority (WWA) in Court of Queen’s Bench alleging “negligent misrepresentation” in some of the tendering.

The contractor is seeking $10.8 million in specified damages, as well as unspecified special damages and payment of court costs.

The breakdown consists of $4,992,170 for additional costs incurred by delays, allegedly caused by changes to the WAA’s design plans after work began; $4,699,682 for changes to underfloor stormwater and sewer drains after they were installed; $872,000 incurred in building an elevated roadway, an aspect of the project which, Ellis-Don alleges, was “negligently misrepresented” during the bidding phase; $198,254 for design changes to fire extinguishers and fire-extinguisher cabinets after they were installed; and $121,874 for changes to the soffits that were originally scheduled to be installed on the building.

An earlier dispute over payment responsibility for cost overruns to do with the excavation phase of the building went to mediation.

The mediator sided with the contractor. Discussions are now ongoing over how much money the WAA will be paying Ellis-Don in that case.

Rempel doesn’t seem to be overly concerned about the lawsuit.

He said that disagreements such as this, in cases of design or construction problems, are quite common in the industry.

He added that this case made the headlines only because the terminal building is such a high profile project.

“In some instances, the contractor sues the client in order to get at the architect,” Rempel said. “That’s because the contractor does not have a contract with the architect. Even though Ellis-Don may feel that the delays were caused by design problems, the company has to sue us.”

The WAA will be filing a statement of defense and a countersuit against Ellis-Don early in the new year.

Steve Smith expects that this matter will take quite a while to sort out.

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