POLITICS

Opposition parties call for auditor to look at cost of Manitoba hydro project

09/24/2014 12:40 EDT | Updated 11/24/2014 05:59 EST
WINNIPEG - Manitoba's Opposition Tories and other groups called for an investigation Wednesday into the spiralling $4.6-billion cost of a major energy project.

The Tories called for the auditor general's office to investigate why the price tag for the Bipole Three hydro transmission line has more than doubled since 2007, when it was first estimated at $2.2 billion. The Tories also said a probe is needed to find out how long the government has known the true cost.

"When (the government) wanted to get re-elected, which they did, they snowed Manitobans and told them this is a good deal for them. Obviously, this is not a good deal for them," Tory hydro critic Ralph Eichler said.

"We should have a sober second thought. We should look at really what those costs are and whether it is still viable."

The Manitoba Liberal Party, the Canadian Taxpayers Federation and a coalition of landowners along the transmission line route also back an investigation.

Bipole Three is a key part of a plan to build new hydro dams in northern Manitoba and bring it south to homes and businesses. Manitoba Hydro originally wanted to build a short, direct transmission line down the east side of Lake Winnipeg, but the NDP government ordered it in 2007 to build a much longer line far to the west, in order to preserve the boreal forest on the east side.

Manitoba Hydro announced last week that the cost of the project had jumped, due mostly to higher-then-expected costs for converters that are needed along the line.

The Canadian Taxpayers Federation first raised concerns about rising costs in 2009, citing leaked Manitoba Hydro documents, but officials at the Crown corporation at the time rejected the idea.

"There needs to be accountability here. There's a history here of Hydro knowing some things behind closed doors," said federation spokesman Colin Craig.

The minister responsible for Manitoba Hydro, Stan Struthers, said Wednesday the higher costs only came to light over the summer as bids came in on the project. Struthers said the extra costs can be spread out over decades, and the transmission line is needed to keep up with rising energy demand.

"I'm not happy that there's a difference between the old estimate and the working budget that we're dealing with now, but I'm very confident that this budget is solid and that this is a good, wise investment."

Hydro said last week that the extra cost will add $3 or $4 a year to the average residential customer. That is on top of 3.9 per cent increases Hydro is already planning annually for the next several years to help fund new dams and other projects.

Struthers said the auditor general is free to examine whatever he wants, but would not say whether the government will speed up the process by joining the opposition parties in the request for an investigation.

Under provincial law, calls for an investigation are given higher priority if they come from the finance minister or the legislature's public accounts committee. Requests from the opposition are treated like requests from a member of the public.

Manitoba's acting auditor general, Norman Ricard, said Wednesday he had not yet received the Tories' letter asking for a probe.