February 27, 2021 (updated March 7)
Yesterday, the BC government announced it will continue construction on the Site C dam amid controversy over reports of foundation instability. Premier Horgan announced a revised budget of $16 billion, doubling the project’s budget from its 2014 estimate, and delaying the completion date by another year.
Horgan said that cancelling the project at this point would saddle the province with a “write down of about $10 billion” including contract terminations and site remediation. He said that cancellation would impact BC’s credit rating and, with $25 billion in BC Hydro debt becoming “taxpayer supported”, would change change BC Hydro’s debt rating.
Robert McCullough, an economist and independent energy consultant hired by the Peace Valley Landowners Association says that the government has not provided an explanation of its $10 billion write-down estimate, or discussed any potential cost mitigation. He says the government’s claims that the sunk costs would need to be recouped over a 10-year period are not explained, given the much longer timeline afforded for recouping total Site C dam costs, including borrowing.
Presented here are some excerpts from the Milburn Report, completed last fall and released in summary form on Friday. This is from section 7.0, Geotechnical Review:
… The Site C Project has experienced extensive serious geotechnical issues:
• left bank tension cracks
• diversion tunnel inlet/outlet
• the right bank drainage tunnel; and
• movement below RCC Buttress.
…. Unlike other project risks that may materialize during construction… the geotechnical issues on this project always existed. Despite decades of research, BC Hydro did not understand how these issues would manifest themselves in the design.
Based on the evidence available to the designer at the time and professional judgement, our geotechnical experts agree with the designer’s statement that:
“Bedding plane shears below this elevation were present but there was no evidence of continuity, and consequently, there was no evidence that their presence and shear resistance would impact the design”
… Although the process to create the design was reasonable, BC Hydro realized it may require some modification depending on field observations … BC Hydro underestimated this risk profoundly.
BC Hydro’s presentations emphasized the significant amount of engineering study completed in the area and how much is known about the geotechnical issues on this site. These assurances, along with the low value placed on geotechnical risk, likely gave a misplaced sense of security to the recipients of this information.
… As of October 9, 2020, the most substantive geotechnical risk identified is the potential instability of the earth fill dam due to potential bedding planes with lower shear strength than assumed in the design.
… In October of 2018, the Technical Advisory Board (TAB) informed the PAB of movement below bedding plane (BP)33.
“During the first phase of spillway excavation, prior to buttress construction, slip along several bedding planes was encountered. This was generally as anticipated except for slip at a depth below the deepest bedding plane (BP 33) that had been considered to be of concern. This slip on its own so far is not consequential. However, if slip along this plane is considered in a stability analysis with conservative design parameters, the design Factor of Safety is violated. Remedial measures are available but are costly and could impact schedule.”
“Therefore, a substantial investigation is warranted to validate the extent of this plane of weakness, improve its strength characterization, and evaluate mitigation measures, if they prove necessary. There is some urgency associated with this undertaking since mitigation, if needed, may be costly and might impact schedule associated with spillway construction.”
Diagram from report:
Read the full summary report here: P. Milburn Special Advisor Site C Summary Report
Response by McCullough Research here: Reassessment of Site C Financial Viability (click on document to navigate pages.)
Critics say that had Horgan cancelled the project when he first had a chance in 2017, the financial impacts would have been much less severe, with an estimated $4 billion in sunk costs at that point, including site remediation.