Why one of the bidders pulled out of the massive Halifax Infirmary project

One of the two groups that could bid on the redevelopment of the Halifax Infirmary pulled out of the process earlier this month because of concerns about the project’s scope in the face of ongoing industry challenges.

A spokesperson for EllisDon, which was prequalified to bid on the project as part of the consortium EllisDon Infrastructure Healthcare, confirmed to CBC News on Monday that the company served notice of its intentions to the provincial government on June 16.

“EllisDon withdrew from the Halifax Infirmary project due to the unprecedented cost escalation, supply chain and labour productivity issues impacting the construction industry that is exasperated by the size and magnitude of the Halifax Infirmary project,” the company said in a statement.

The Halifax Infirmary redevelopment is the largest portion of the so-called Queen Elizabeth II Health Sciences Centre New Generation project. That work also includes construction of a new outpatient centre in Bayers Lake (EllisDon won the contract for that project) and the renovation and expansion of the Dartmouth General and Hants Community hospitals.

In 2018, the new generation project was estimated to cost $2 billion. With a global rise in the price of materials, labour shortages and inflation, however, it’s unlikely that figure remains accurate.

Final bid to be reviewed this fall

The tender for the Infirmary work was supposed to be awarded by the end of the spring, but last week the province confirmed the award was being delayed for several months.

The government declined interview requests for Premier Tim Houston or Public Works Minister Kim Masland on Monday. A spokesperson for the province said in an email that the tender was delayed to review the scope of the project “and to allow the successful bidders to secure funding based on the current market conditions. This includes but not limited to the labour market, commodity pricing and supply chain availability.”

The statement said the procurement process is continuing with the remaining bidder, Plenary PCL Health, and that it’s hoped the final bid would be reviewed in the fall. A public update will be provided at that time, according to the province.

Internal documents CBC reported on last week hint at the challenges the scope of the Infirmary project is facing.

Province rejected proposed joint venture bid

The documents say population projections used in 2015 to design the project have already been surpassed due to the recent population boom in Nova Scotia. As a result, the documents recommend adding 144 beds, four operating rooms and a new emergency department to the project.

The statement from EllisDon says that at the beginning of the year they and PCL proposed a joint venture for the work, “which would be the best solution to address these challenges.”

“The ability to joint venture is critical because it allows both EllisDon and PCL to draw from the combined strengths of their balance sheets, human resources, and trade partners to deliver this critical project.”

EllisDon said the idea was rejected by officials with the province’s Public Works Department. The government spokesperson confirmed receiving the proposal.

Opposition politicians, meanwhile, continue to express concern about what’s happening with the project.

Public needs more information, says opposition

Liberal public works critic Braedon Clark said having only one bidder on the massive redevelopment, which includes more beds, operating rooms and a new cancer centre, is “a huge problem.”

“There’s no competitive bidding at this point,” he said.

“The one bidder left at some point will make a bid. You know, the government can say, ‘Well, we’re not obligated to take it,’ but then you’re back to square one and you have no project.”

Clark said the Halifax Infirmary project is “the keystone” of the Tory government’s election promise to fix health care. Any problems with the project will have a trickle-down effect throughout the system in Halifax and the rest of the province, he said.

‘We need to make sure we’re getting it right,’ says MLA

NDP Health critic Susan Leblanc said the government finds itself in the difficult position of trying to continue the process with only one bidder and risk an uncompetitive bid, or hit pause on the project to get more bidders involved and risk major delays to a vital infrastructure project.

“I am very acutely aware of how badly we need this hospital and how badly we need better health services in Nova Scotia and so I don’t want to say we should press pause, but I do think we need to make sure we’re getting it right,” she said.

Leblanc said it makes sense to reassess things when new information arises, such as the change in population projections, but she said the government needs to provide the public with more information about the things it’s considering and what it could mean for the project.

When the QEII New Generation project is complete, it will allow for the closure and eventual demolition of the Centennial, Dickson and Victoria buildings on the Victoria General Hospital campus in Halifax.

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