VICTORIA, B.C – The Government of British Columbia announced it’s continuing with the Site C dam project for an estimated $16 billion with a one-year delay.

The decision comes after a report done by Special Advisor Peter Milburn and independent experts deemed Site C as safe. Milburn’s report states improvements are needed to enhance project oversight and risk and commercial management.

Milburn, who was appointed to conduct the report in July 2020, is a former B.C. government bureaucrat with a background in civil engineering. Last month, the province announced that two international experts would be evaluating the site for safety issues.

In 2014, Site C’s construction was approved for $8.7 billion and was revised to $10.7 billion in 2018. The province says the new cost increase is due to COVID-19, geotechnical issues, other related code, and schedule pressures.

“͞ ͞The project is facing new challenges, and we are committed to managing it in the best interests of British Columbians. Cancelling would cause people’s electricity rates to skyrocket, and we will not burden people with additional financial stress during these difficult times with nothing to show for it. Site C is already 50 per cent finished, and our government will complete this project, ensuring British Columbians have clean and affordable power for decades to come,” says Premier John Horgan.

Halting Site C construction now will have severe impacts on ratepayers and taxpayers, says the province, believing Brtish Columbians are better off, even with higher costs.

Terminating the site will have an immediate $10 billion loss due to sunk costs, contract termination, and site remediation costs. Further debt implications may occur if rating agencies remove BC Hydro’s status as “self-supporting”, which would result in BC Hydro’s $25 billion debt becoming “taxpayer-supported”. This would increase Hydro’s rates by 26 per cent over ten years.

The termination could also affect BC’s credit rating causing higher costs for the province’s borrowing. Having taxpayers take on the debt would also reduce COVID-19 recovery funds, says the province.

With the site construction continuing, costs will be recovered through rates for more than 70 years, and the impacts to rates won’t be implemented until the dam is up and running. At the current estimated cost, rates will be three per cent, or $36 per year, higher than what was forecasted on a $10.7 billion project cost.

The province has also announced new leadership at BC Hydro due to the challenges the project has faced. Doug Allen has been appointed the new chair of BC Hydro’s board. Allen replaces Ken Peterson who was appointed chair in 2017.

Milburn reviewed project governance and management of risks, construction, contracts and claims handling. His report, which did not audit costs or the schedule, provided 17 recommendations that were all accepted by BC Hydro and the provincial government. The recommendations included a restructured and strengthened Project Assurance Board.

The two independent engineering experts, John France and Dr. Kaare Hoeg, examined the design of the right bank foundation enhancements and earthfill dam. The duo concluded the dam will be safe and reliable, meeting Canadian Dam Association guidelines.

To fix the foundation issues, crews will use piles, which are concrete-filled pipes, as an anchor, approach channelled enhancements, and additional drainage within the right bank. This solution has been reviewed by the Technical Advisory Board and external dam experts.

“Our government has taken this situation very seriously, and with the advice of independent experts guiding us, I am confident in the path forward for Site C,” said Bruce Ralston, Minister of Energy, Mines and Low Carbon Innovation.

“B.C. needs more renewable energy to electrify our economy, transition away from fossil fuels and meet our climate targets. Site C will help our province achieve these things and is currently employing about 4,500 people in good-paying jobs.”

The following reviews are currently underway at Site C:

The advisory board also reviewed the main dam, deeming it safe. If enhancements are required, the province says it would be low cost and non-intrusive by adding fill to the dam’s downstream section’s surface.