The $410 million Tlicho All Season Road – that will eventually stretch 97 kilometres from Behchoko to Whati – is a private-public partnership (P3) which means the Government of the Northwest Territories is partnering with private companies for funding and contracting work.
These types of partnerships are either advantageous for the territory, or fraught with perils for Northern workers, depending who you ask.
“P3s have been proven to way to advance major projects by achieving best value by money for the government and the tax payers,” said Infrastructure Minister Wally Schumann at the opening ceremonies for the all-season road on Aug. 24 in Whati.
“This project is a great example of how the government, industry and Indigenous stakeholders can work together to invest in transformative infrastructure.”
Schumann was joined by Whati Chief Alfonz Nitzia, various MLAs, officials and community members for the ceremony that christened the build.
The project will be the first of it's kind in terms of infrastructure projects in the territory.
The GNWT has entered into this partnership with Northstar Infrastructure, a partnership between the Tlicho Investment Corporation and Kiewit.
NorthStar will handle the construction of the road with Peter Kiewit Sons ULC, Hatch Corp. and Thurber Engineering Ltd. are contracted for design.
The road will start at Highway 3 outside the turnoff for Behchoko and circumvent the current winter road system.
This P3 project is established in such a way that measures are put in place to ensure labour hired will be from the North and money spent on the project goes to Northern companies.
Union of Northern Workers president Todd Parsons has also been critical of P3s, who says unions generally are not in favour of them.
“P3 projects involve companies that are focused on their bottom line as opposed to a government focusing on their services. What happens is that cost efficiencies come into play to increase their profits,” said Parsons.
“If in a private hospital they could hire five people to do a cleaning job, for example, and if ten people are needed to do that job effectively, what we see is a dirtier hospital and overworked staff for the sake of profits.”
Parsons did say, however, unions would not get into conflicts regarding P3 projects with Indigenous governments and would be more inclined to support them when the benefits stay North.
“We'd see greater economic benefit, we'd see money earned by an Aboriginal corporation invested here in the north,” said Parsons. “We wouldn't see the same situation that we have here at Stanton where that corporation takes it's money and goes south.”
According to Department of Infrastructure documents, 30 per cent of total capital costs for the all-season road must be paid to Tlicho/Northern businesses with at least 25 per cent going specifically to Tlicho businesses.
Measures have also been put in place to ensure Northern hiring targets so workers are not simply flown in from the south and salaries, experience and training do not leave the North.
For the Whati road, the target for Northern labour will be set at 35 per cent. Targets set will be considered “sliding,” a higher percentage or Northerners will be hired as the project moves along.
The first increase will be to 55 per cent during the first five years of the road operating, and 75 per cent during the last five years of operations.
Kevin McLeod, the assistant deputy minister of infrastructure, said in a previous briefing for the project said penalties would be put in place if these targets were not met.
Schumann said he'd like to see more projects like this in the future, but P3 projects have seen their share of criticisms before.
Making a member's statement in the legislative assembly Yellowknife North MLA Cory Vanthuyne earlier said P3 projects need better rules in place.
“We need to ensure that, in each case, there is a strong benefit component to Northerners,” said Vanthuyne. “For example, we have a detailed business incentive policy. It ensures that the northern businesses bidding on government contracts have an advantage when (the policy) is applied. As the government conducts operations, northern businesses can successfully be awarded government work.”
He said that when it comes to P3s, the policy is not applied and Northern benefits are not always mandated, an example being the Stanton Territorial Hospital, which had contracted some services to southern companies.
The Tlicho all-season road will officially be open to the public in the fall of 2022.