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Town looks for new Spirit Centre contractor

The Spirit Centre project could go over budget and be delayed as a result of the town seeking to replace the project’s contractor, mayor Bruce Lennon said Friday.
The Spirit Centre construction site sat silent on Sunday as the town seeks to find a new contractor to replace Balon Construction.
The Spirit Centre construction site sat silent on Sunday as the town seeks to find a new contractor to replace Balon Construction.

The Spirit Centre project could go over budget and be delayed as a result of the town seeking to replace the project’s contractor, mayor Bruce Lennon said Friday.

The town announced last week it is seeking a court order to terminate its contract with the troubled contractor Balon Construction, and is looking for a new contractor to take over and complete the project.

The town’s contract with Balon stipulates a set price of $12.6 million and a completion date that would have seen the facility open this fall. If that contract is terminated the town will no longer have those guarantees.

The town has put out a Request for Proposals (RFP) that has a submission deadline of Tuesday, Feb. 8. Neither the completion date nor the new price will be certain until a new contractor is hired and a new contract is signed.

Lennon said a price increase of as much as $1.26 million over the original $12.6 million would be acceptable — a total of $13.86 million.

“Even if it’s within 10 per cent, that would be pretty close to where we want to be, but it’s hard to tell at this point,” he said.

He emphasized, however, that as the construction economy is still very “soft,” the town’s consulting engineers have suggested the project could still be completed at a cost very close to the original $12.6 million.

As for the timeline, Lennon said there is a possibility the facility would not be ready to use until spring 2012.

The town’s RFP stipulates the bulk of the work is to be completed by Sept. 21, 2011, but the completion date will not be certain until the town has hired a new contractor.

Administration will consult with the new contractor about the feasibility of having the arena ready to go for next winter, but there is no guarantee.

“It’s not a situation where we can wait three or four months in the middle of winter and switch things around. It’s either going to happen in the fall of 2011 or the spring of 2012,” Lennon said.

The town will make an application with the Court of Queen’s Bench in Edmonton on Wednesday to have the contract terminated, CAO Darrell Garceau said, which will effectively end the town’s rocky relationship with Balon.

Problems with the contractor were first made public in early October, when Balon Construction entered a voluntary receivership, effectively turning over its finances to BDO Canada Ltd., which would ostensibly make sure Balon’s finances were handled appropriately and the various subcontractors were paid.

Town administration was notified last Wednesday, Jan. 26, that BDO had laid off some of the staff at Balon.

“That included staff that were assigned to the Spirit Centre project,” Garceau said.

That caused concern, because a contractor was no longer on site. Administration met with council, who made a decision to apply to the courts to have the contract terminated.

“We will do our best to see if we can build this project within the time frame of the original contract,” Garceau said.

“We won’t know until the contracts are awarded. There’s a lot of unknowns.

“Within a couple weeks we will have a better understanding about the timeliness of completing the project.”

Westlock is not the only community to have problems with Balon working on a major infrastructure project.

At the time the Spirit Centre contract was awarded, Balon was also the contractor for a new administration building in Drayton Valley for Brazeau County.

In December, Brazeau County got consent from BDO to get out of its contract with Balon.

The contract was terminated in early December, and work on the project was halted until just recently, Brazeau County CAO Ron McCullough said.

“We determined the contract was not being fulfilled and the performance expectations were not being met, so we filed a claim with the bond company,” he said. “Just this past week, construction has recommenced under provisions with the bonding company.”

According to a press release issued by Brazeau County, the budget for the project jumped from $19.33 million to $19.85 million, an increase of about $520,000.

Both Lennon and Garceau emphasized that work on the project will continue even if the contract with Balon is terminated.

“It’s not like this project has come to a grinding halt,” Garceau said. “The town is just basically taking steps and going forward to take control of the situation.”

Phone calls to Balon Construction’s office in Edmonton went straight to a voicemail box; nobody could be reached.