EDMONTON — The Alberta government says it's reluctantly following through on a deal made last year by the Tories to rebuild a golf course west of Calgary at a cost to taxpayers of millions of dollars.
The Kananaskis Country Golf Course, which calls itself one of the premier golf destinations in the Canadian Rockies, was severely damaged by flooding that ravaged the region in 2013.
An independent review by Deloitte LLP of the sole-sourced agreement with the Crown-owned course's operator, Kan-Alta Golf Management Ltd., says the net cost to taxpayers could be up to $8.8 million for the rebuild.
The report says breaking the deal, which also covers the operator's lost profits and extends the operating agreement until 2026, could saddle taxpayers with $16.9 million in higher legal and other costs. The government estimates that bill could swell to up to $30 million.
Environment and Parks Minister Shannon Phillips said the NDP government doesn't want to be in the golf course business, but proceeding with the rebuild is the best approach.
"Albertans could have had liabilities in the tens of millions of dollars if we had recklessly proceeded with a decision to break the deal with the current operator,'' Phillips said Wednesday.
Brian Bygrave, one of the owners of Kan-Alta who said he has been involved with the course since it opened in July 1983, praised the government's decision.
He said the 2014 agreement will bolster the economic stability of the Kananaskis region, which draws tourists from around the world.
"It is extremely good news for everybody concerned. For the Alberta government, our operating company, the taxpayers of Alberta and the golfing public,'' he said.
"I am extremely relieved that this decision has been taken and we can get back to the job to get these golf courses back to opening.''
Bygrave said the province put a stop-work order on reconstruction work back in March.
The 36-hole course, which charged up to $98 for a regular round of golf before the flood, is to reopen in 2017. Alberta residents were charged a rate of $78.
The course was built when former Progressive Conservative premier Peter Lougheed was in office using money from Alberta's Heritage Savings Trust Fund.
The Deloitte report assesses three scenarios for the NDP government: continue with the rebuild of the golf course; reclaiming the land back to its natural state; and tendering the golf course operation under a new long-term, pre-paid private operator lease.
The report warns against breaking the rebuild contract.
"The liability from termination of the current agreements makes the transaction option financially unattractive for the Crown,'' reads the report.
Alberta's auditor general began a review earlier this year of the government's 2014 contract with Kan-Alta, which is expected to be completed in 2016.
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