LOCAL companies and others are owed hundreds of thousands of dollars by the main contractor hired to work on a major industrial project southwest of Terrace.
And a dispute between that main contractor, Dowland Industrial Works, and Veresen, a Calgary energy company, has resulted in Dowland pulling its workers and equipment out of the $75 million Dasque-Middle run-of-river hydroelectric project owned by Veresen.
Dowland says it can’t pay its subcontractors because Versen hasn’t been paying them. In turn, Veresen says it isn’t responsible for commercial arrangements between Dowland and the companies it hired.
One of the local companies affected is Geier Waste, which was hired by Dowland last fall to remove garbage and other waste from the site located 20km southwest of Terrace.
Geier Waste owner Rob Geier says he’s owed approximately $20,000, money he says he’s likely never to see.
“And that’s probably not a lot compared to other people in town,” said Geier. “This doesn’t bode well for the future.”
Geier said he’s perhaps better able to absorb the loss than other companies because he did not have to purchase goods in order to service his contract with Dowland.
“Alberta people who are wanting to open up our area for export come in and then do not pay their bills. Maybe you guys should stay home and we’ll suffer in silence like we have been for the past 10 years,” said Geier.
A March 6, 2013 memo sent by Dowland to its subcontractors and suppliers said that “Dowland has performed a significant amount of work for which we are owed payment by Veresen and, due to the owner’s unwillingness to compensate Dowland as per agreements, we have submitted several claims.”
According to the memo, Dowland is “actively pursuing all available avenues to collect compensation for work performed to date and will provide another update on our progress by the end of the month.”
Veresen official Doreen Miller said “the company has had some issues with the civil works. Our focus right now is to move forward as quickly as we can and we’re still really excited about the project and want to see it through to construction completion.”
As for the people in Terrace and elsewhere still owed money, Miller said that Veresen is not legally accountable to local companies who Dowland subcontracted.
“Unfortunately I don’t have any information on the subcontractors. I can only speak to the Veresen contractors,” Miller said.
Veresen has taken on some of the companies being used by Dowland and is dealing with them directly.
The project involves taking water from two creeks, Dasque and Middle, and diverting it via pipes through generators to create power before returning the water to the creeks.
A visit to the site last week revealed rows of the huge pipes called penstock collecting snow and lumps of partially blasted rock jutting out precariously in the location where construction of the Dasque powerhouse should be underway.
A 21 km power line is to connect the Middle and Dasque generator powerhouses to BC Hydro’s Skeena Substation and then into the provincial grid.
The power line follows the same route cleared for a hydro line between Terrace and Prince Rupert.
The project was first developed by a small Vancouver company called Swift Power which became a subsidiary of Veresen in 2010.
Swift, which began exploring the potential of the two creeks several years prior to selling to Veresen, did establish a close relationship with the Kitselas First Nation whose traditional territory takes in the project area.
Construction work began the year after with plans set for completion last year.
A note on Veresen financial filings made this month for the last quarter of 2012 indicated “the project experienced delays in 2012 due to challenges in progressing the civil works.”
Veresen’s Miller said the company has now pegged the fall of 2013 as a completion date.
BC Hydro agreed in 2010 to buy power from the project but an official of the crown corporation wouldn’t provide details because of commercial confidentiality.
“Electricity purchase agreements are designed to take much of the ‘worry’ out for BC Hydro and our ratepayers,” said Simi Heer.
“There are consequences if the power is not delivered on time.”
A provincial environment ministry statement noted that the project has to abide by a number of environmental and other regulations.
“From the government’s perspective, there are no concerns regarding the timeline or completion of this project,” read the statement.
The Dasque Creek powerhouse will have the potential to generate 12 megawatts of power and the Middle Creek powerhouse 8 megawatts of power.
The BC Hydro contract with Swift Power/Veresen is one of many signed by the crown corporation in an attempt to capitalize on clean energy alternatives to the hydrocarbon industry.
Dowland got its start in the Northwest Territories in 1983 and has offices in Edmonton and in Inuvik.
It also has offices in Iqaluit, Kamloops, Rankin Inlet, Saskatoon, Thunder Bay, Whitehorse, Winnipeg, Yellowknife and Anchorage, Alaska.
Phone calls to the company were not returned.