Major Canadian Utility Commercial Damages Matter

A new 500-kilovolt transmission line was built to deliver reliable power to major populations centers in a Canadian province. It carries electricity from transmission points along two rivers to more than 3.2 million people.

A utility corporation owned by the government and citizens of the province was awarded the design-build contract in 2011. Construction got underway on the largest expansion in three decades of the state’s transmission system the following year.

The transmission line was completed almost a year late in 2015, following delays caused by a range of factors including scope changes, design and construction challenges, and conditions along the line’s route. The new line was built through some of Canada’s most challenging and diverse terrain, crossing mountains, major rivers, grasslands and highways. It also traverses public and private lands.

Brief

The main contractor retained HKA to provide delay and disruption analysis and forensic accounting analysis associated with a US$310 million claim on the project.

What we did

We assembled an expert team comprising specialists in the following areas:

• Schedule analysis and support
• Forensic delay analysis
• Disruption / loss of productivity quantum analysis
• Forensic accounting

We also provided expert witness testimony during arbitration, along with services for the arbitration hearing and post-brief support.

Outcomes

Our comprehensive and detailed analysis provided the basis for our client’s successful claim and the recovery of the majority of its incurred costs.

The arbitrator – in a decision released in March 2018 – found that changes made by the utility corporation to a portion of the line had delayed the contractor’s work. Also, access problems involving private land and archaeological sites disrupted its construction schedule, causing a loss of productivity and additional costs for which the utility was responsible under the contract.

Interest was also payable on some of these award amounts, taking the total recovered in commercial damages to approximately US$135 million.