Local companies have lost hope that they will ever see the money owed to them by the departed and now bankrupt construction giant Dowland.
Documents released by their international receiving company Alvarez & Marsal Canada Inc. show Dowland left 34 local businesses owed a total of nearly $700,000 at the time of their bankruptcy in May for the work they performed on the Dasque-Middle hydroelectric project near Terrace.
The documents made public on the receiver’s website show that Dowland’s three subsidiary companies sank under a staggering amount of debt.
The repayment of Terrace subcontractors, who are listed as unsecured creditors, would happen only after the secured creditors are repaid.
The statements show Dowland Industrial Works owes over $50 million, including $21 million to secured creditor Royal Bank of Canada.
The bankrupt company’s assets are valued at $13,823,499.
The other two subsidiaries—Dowland N.W.T. Limited and Dowland Contracting—also owe tens of millions to a long list of creditors in the Yukon, Nunavut, Northwest Territories and Alberta.
Rob Dykman, owner of the Terrace’s Coast Mountain Wireless and chair of the Terrace Economic Development Association, said that Dowland pulled out of Terrace with 45 of his two-way radios still in their vehicles, a total of about $50,000 worth of gear and rental costs.
“I’m still looking at my options here about what to do with that. It is still technically stolen property. They hightailed it with my stuff,” Dykman said.
“Unfortunately sometimes with larger companies that come in from out of town it doesn’t necessarily mean they are always secure. I think that’s the biggest thing I learned, that no one is beyond going into the receivership, big or small,” he said.
“I think companies in Terrace are going to be a little more cautious in letting the amount owing by certain companies get out of hand.”
Dowland was the second prime contractor to try their hand at the 20 megawatt run-of-river project located 20 kilometres southwest of Terrace and owned by Calgary-based Veresen.
Another large contractor called Surespan pulled out in January 2012, filing a $2 million legal claim against Veresen soon after.
Terrace companies performed timber clearing, digital communication setup, fuel supply, waste management and many other services for Dowland, who promised payment in several memos sent following their sudden withdrawal to Alberta in March.
Local business owner Rob Geier, of Geier Waste Services, is still smarting from the $20,000 loss he took after working with Dowland. He had a written contract with Dowland that he said means nothing now that the company is in receivership.
“I think all the local businesses are more cautious now about extending terms to companies that aren’t a known quantity, right?” Geier said. “There’s all this out-of-town work coming in. We just have to be more cautious. Do reference checks. Give 90 days before they have to pay.”
Doug Ames, co-owner of Terrace’s Northwest Fuels, said he is moving forward and not dwelling on the loss too much.
“I’m disappointed, that’s all I really want to say about it. Unfortunately once they declare bankruptcy there isn’t a lot of recourse for us. That’s all I have to say about that.”
As for the current progress of the Dasque-Middle hydroelectric project, Veresen spokesperson Dorreen Miller said in March that the project needs to be completed this fall in order to begin generating power for BC Hydro in 2014.
In an email last week Miller said that, “we have engaged replacement contractors and continue to move forward with completing the civil works and the balance of the project. While the last six months have been challenging, we believe we have turned a corner. We’re hopeful that with favourable weather conditions on our side, we will make significant progress towards completing the project over the coming months.”
Though he couldn’t reveal the specifics of the contract, a previous statement by BC Hydro official Simi Heer stated that, “There are consequences if the power is not delivered on time.”
The Dowland empire spanned several provinces and its financial troubles hindered major projects including hospital and water treatment plant construction in the Yukon and Nunavut.
Since Dowland’s departure, many of the local and visiting companies on the $75 million project have been doing work directly for Veresen.
“We’re using several contractors to complete the remainder of the project,” Miller said.