Smelter Modernization: Local contractors to get lion’s share
Rio Tinto Alcan last week unveiled millions of dollars in Kitimat Modernization Project spending.
And publicly committed to a target of 93 per cent of the work going to local – Kitimat and Terrace – contractors.
More than two dozen companies from Prince Rupert to Prince George attended last Wednesday’s Local Contractors Forum put on by RTA at the Kitimat Valley Institute
Also present were the RTA project director for KMP Michel Lamarre, his Bechtel counterpart Andy Lederman, and a phalanx of project personnel from both companies.
In an introductory speech for the day-long session, Lamarre said, “We are very pleased that the Kitimat Modernization Project continues to be one of the highest positioned projects for our company. We are still moving ahead.”
Lederman, who described his team’s job as “to implement successfully the KMP,” showed a power point pie chart indicating the 93 per cent local number for bid packages revealed that day, a number he said was based on “the skill sets that are available in the local community.”
That chart also showed three per cent of the work going to BC contractors, three per cent to Canadian and the remaining one per cent to other Northwest companies.
Andy Phelps, Bechtel site manager who recently moved with his wife to Kitimat, pointed out his company was in the business of construction management.
“We don’t bring a work force, we don’t bring equipment,” he said, adding Bechtel relied on contractors for that.
Phelps also noted that the longer than originally planned timelines for KMP presented a “unique opportunity”.
He explained that usually only a small percentage of engineering work has been done by the time actual construction begins.
Therefore, “You have to make a lot of assumptions and you also find yourself (progressing) in fits and starts.”
However, with KMP the engineering and most of the infrastructure work would be done before the project started “coming out of the ground”.
Mark Stanley, Bechtel procurement and contracts manager, told the crowd he had been working on the project for 14 months, adding, “I am glad to see it rock and rolling.”
He then outlined the 17 different bid packages that would be going out this year – one of which, general services, had already closed.
And bids would be sought on some of the other contracts in the very near future, the transformer package being an example.
Stanley noted the ship that would bring the $100 million dollars worth of equipment to Kitimat had already been booked and was expected to arrive here by the end of May.
In preparation for that arrival, an area 50 metres by 100 metres had to be levelled and compacted and a containment area – including security fencing – completed.
Therefore, that contract had to be “wrapped up” in April.
And proposed road work had to be under way by June.
In a later interview Lamarre was asked to put a dollar figure on all the packages announced that day.
“We have elected, on purpose, not to speak about the dollar value,” he replied.
“We are still developing the scope, we are still receiving pricing from the different contractors.”
Asked if the amount of money for the work was the board-approved $300 million announced in October, Lamarre would only say that the various packages represented “a part of it”.
The important message, he said, was “everything we will spend, we will spend locally.”
Given the scope and complexity of some of the packages might be beyond the scope of a single local contractor, Lamarre was asked if RTA/Bechtel envisioned several of them teaming up to bid on a package.
“Absolutely. If they would do that, then we can do that, there is no doubt about it.”
But, he added, those packages could also be broken down into smaller units so that more contractors could get involved.
Pointing out many other RTA projects around the world have been stopped dead, Lamarre emphasized, “We haven’t stopped. We are at a slower pace, but we are taking this opportunity to keep going and increasing local involvement.”
As for the purpose of the forum, he said it was to send a message. “KMP is real and KMP is going ahead.”
