06/18/2014 05:02 EDT | Updated 08/17/2014 05:59 EDT

Bluenose II costs balloon, now more than $4M over budget

The price tag for the rebuild of Nova Scotia's iconic schooner Bluenose II has ballooned to nearly $19-million — $1 million more than the previous estimate — Nova Scotia's public accounts committee heard today.

Deputy Minister of Communities, Culture and Heritage Kelliann Dean answered questions Wednesday about the problem-plagued rebuild of the Bluenose II that's now more than $4 million over budget. She appeared before the public accounts committee in Halifax Wednesday morning.

Dean told the committee that project management fees have also skyrocketed. The Ottawa-based MHPM Project Leaders Inc. originally bid $375,000 for the job back in 2009. The project management fees are now at about $1.4 million, about three times the original estimate for the work.    

Dean defended the firm when asked if the company should have been replaced after failing to keep the project on schedule and on budget.

"When the project timelines shift, we're already halfway down the road. We have to determine what is the greater risk of changing the people involved in the project or working to try to continue to move the project forward and finding ways to to mitigate the risks as we go forward," she said.

Dean says another option was moving the project out of Lunenburg and giving it to another builder but that too was unacceptable.

"There were significant challenges with the design, fabrication and installation of the rudder and steering gear. There were delays at various points throughout the project related to designs, drawings, approvals and the change-order process. There was frustration and there were communications break downs between various parties which further complicated the project," said Dean.

She said the province has to hold sea trials on the vessel to help determine the repairs that are needed to the troublesome rudder, which has been difficult to turn.

A precise date for the trials in Lunenburg wasn't provided during Dean's appearance before a legislature committee.

The province recently hired a consultant to help it look at the latest problem to emerge with the restoration as the premier's office took a greater role in the project.

Wilson Fitt of Costello Fitt Ltd. will report to the deputy minister in the premier's office about the problems with the rudder on the sailing vessel.

The province has said Fitt will provide direction and work directly with the builder, the vessel operators and a new design team. He will also recommend designers and other consultants as needed, stay in touch with the American Bureau of Shipping and be directly involved in meetings, tests and sea trials.

The schooner was supposed to return to regular sailing two summers ago after an extensive two-year rebuild at a cost of $15.9 million, with $4.9 million from Ottawa.

But the restoration has suffered from budget overruns and repeated delays, prompting Premier Stephen McNeil to ask the province's auditor general to review the project.

Last month, McNeil announced that David Darrow, his deputy minister and the clerk of the Executive council, would assume oversight of the restoration.

The Opposition Progressive Conservatives say McNeil and Darrow should be the ones appearing before the committee.