(Whitehorse) - The Office of the Auditor General has released its long awaited report on the Mayo/Dawson transmission line project. The report, which was released earlier today, identifies a number of problems encountered by Yukon Energy in constructing the line.
While Yukon Energy agrees with the Auditor General’s conclusions that there were numerous difficulties with the project, the company’s president says steps have already been taken to address those issues. “Yukon Energy recognized some time ago that we needed to make improvements in some areas,” David Morrison said. “That’s in part why we recently changed our capital project processes. A committee now reviews all capital project plans and makes recommendations to the board of directors for approval. Projects have detailed descriptions of scope and forecasted costs.”
Yukon Energy has also developed new contracting policies and guidelines that have been approved by the board of directors.
Yukon Energy’s forecasts show that the Mayo/Dawson line remains a good project for Yukon ratepayers, saving them about $20 million dollars over the life of the line. Morrison says the company has learned from its past inexperience. “The Mayo/Dawson line was the first major capital project undertaken by Yukon Energy. While the findings in the report certainly demonstrate Yukon Energy did not have the appropriate internal processes to deal with such a large initiative at that time, the measures we have already undertaken and those we plan to carry out shortly will ensure that the problems encountered with the Mayo/Dawson project will not occur in future.”
In terms of future plans, Yukon Energy will arrange to have an independent audit done later this year of project management practices and procedures. A project management policy will then be prepared. As well, Yukon Energy is proposing that all projects worth more than $3 million receive prior approval by the Yukon Utilities Board.
It was shortly after Morrison became Chair of Yukon Energy in May 2003 that the Corporation’s board of directors requested an audit be done of the Mayo/Dawson project because of concerns about cost over runs and construction delays.
“Given the magnitude and significance of the transmission line to the Yukon, the board felt it prudent and responsible to conduct a thorough review of the project,” Morrison said.
A detailed review of the Mayo-Dawson project’s impact on ratepayers is part of public hearings set to occur this spring before the Yukon Utilities Board. Information filed for that hearing shows that the project will result in savings to ratepayers, and that the “break-even” cost for the line is about $52 to $56 million.
Construction of the 232 kilometre line from the Mayo hydro generating station to DawsonCity started June 2001 and the line was commissioned in September 2003. The final price tag for the project is currently estimated at approximately $36 million.
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Contact:
Janet Patterson
Communications Supervisor
Yukon Energy Corporation
(867) 393-5333
janet.patterson@yec.yk.ca
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