Vaughn Palmer
Sun

VICTORIA – Premier Gordon Campbell had a direct hand in the Vancouver convention centre project from the outset.

He, more than anyone else, decided that the expanded convention centre, like the highway to Whistler and the rapid transit line to the airport, would be part of the supporting infrastructure for hosting the 2010 Winter Olympics in Vancouver.

He decided it needed to be ready well ahead of 2010, forcing the project onto a fast track that saw construction begin before plans were complete.

When the province couldn’t find a private sector builder dumb enough to assume the risk in a public-private partnership, Campbell decided that government would go it alone.

When Ottawa wisely insisted on capping its contribution to this overrun-waiting-to-happen, the premier blithely committed the province to absorb every penny of the additional cost.

Campbell wanted it built the way he wanted everything else done, namely his way. So, in February 2003, the premier installed his deputy minister, Ken Dobell, as chair of the convention centre expansion project board and kept him at the helm for four years.

Four years of budget overruns and dubious decision-making, according to this week’s devastating report from the office of the auditor-general.

Not until this past spring — with the project hundreds of millions of dollars over budget — did the government appoint developer David Podmore (“he knows how to build big projects”) to try to get things under control.

Until then, the central role of the premier’s No. 2 was underscored in the project service plans, released annually as part of the government accountability framework. “I am accountable for the contents of this plan,” board chair Dobell would avow, in the written testimonial that accompanied each year’s update of the plan.

“All significant assumptions, policy decisions and identified risks have been considered in preparing this plan,” the statements continued. “I am accountable for delivering on the service plan and for measuring and reporting actual performance.”

Contents. Assumptions. Decisions. Risks. Deliverables. Measuring. Reporting. Dobell was accountable on all those points.

But the buck didn’t really stop with him. Dobell, a consummate public servant, was the premier’s go-to guy. Campbell relied on him, more than anyone else, to get things done, the way he wanted them done, when he wanted them done.

If the project was being ramrodded to ensure it was ready for the 2010 Olympics, it was because Campbell wanted it that way.

If the result was a budget-busting increase in costs . . . well, it is inconceivable that Dobell would not have kept Campbell in the loop every step of the way.

The auditor-general complained, in one of the most damning passages of his report, that “from the beginning of the project the board lacked a member with the appropriate expertise for a project of this specialized nature.”

Campbell wouldn’t have seen the need. He had Dobell. (Other board members included a defeated Liberal candidate and the former president of the party. Choice.)

The Dobell-to-Campbell connection needs to be underscored. As the Liberals run for cover in the wake of the auditor-general’s report, they will do everything they can to shift the blame away from Campbell.

Other cabinet ministers. Other deputy ministers. Project managers. Consultants. Inflation. Evil spirits. Any culprit will do, just as long as the trail doesn’t lead back to the premier’s office.

But that is also why one of the most revealing events in the history of this fiasco was the sod-turning on Nov. 8, 2004.

For the premier himself took charge of the announcement and delivered the words he surely wishes now that he could take back: “There are contingencies built into the project and it’s going to be run professionally. This will be built on time and on budget . . . Count on it.”

Wrong on three counts.

The budget has been revised half a dozen times since Campbell spoke those words.

Construction is almost a year behind schedule. As for “run professionally,” the auditor-general’s report supplies a number of reasons for doubting that claim.

Still, Campbell said it. And it was entirely characteristic for him to be there, taking the spotlight. Every minister in government has been big-footed by the premier at events large and small.

In their private moments, some Liberals may take a certain satisfaction in the prospect that the most damaging quote in this affair was supplied by the guy who insists on being front and centre in everything.

But that’s the downside of being a hands-on premier. When something goes wrong, your fingerprints are all over it.

© The Vancouver Sun 2007

 

Sun

What did the provincial Liberal government learn from the fast-ferry fiasco?

Very little, it appears.

That is the clear impression we get from reading the devastating report by British Columbia‘s acting auditor general on the cost overruns for the Vancouver Convention Centre expansion project, which ends with the chilling warning that the $883.2 million now budgeted for the project may not be the final tab.

Errol Price’s report is a disturbing tale of denial, incompetence, misleading reports and misplaced optimism over a period of years as the price rose almost $400 million from an initial estimate of $495 million.

It starts with a failed attempt to find a private sector partner to build and manage a new convention centre.

The province pushed ahead on its own, with contributions from the federal government and Tourism Vancouver — but with sole responsibility for any increases in the initial budget of $495 million. That figure, Price explains, was not really a budget but an estimate based on how much money had been raised for the project.

The naming of the convention centre as a venue for the 2010 Winter Olympics created a ironclad deadline for construction to be finished.

That looming deadline prompted the Crown agency (Vancouver Convention Centre Expansion Project Ltd.) set up to manage the project to start construction on the foundation before the final design for the above-water portion had even been set and before any contracts had been signed.

The Crown agency was given a tough assignment. It had to build a massive project in a hot construction market with tight deadlines.

But for at least three years, its officials lived in denial, budgeting just four per cent for inflation when their advisers told the agency the increase would be more than that. As it turned out, even the higher estimates were way too low.

By July 2005, tenders were coming in 25 per cent higher than expected — yet the agency clung to its original inflation estimate of four per cent for 2006.

Why?

It appears to have been part of a pattern set by the provincial government of trying to pretend that costs were under control, even though everyone involved in the project, including the deputy minister who sat on the board and reported back to the government, knew they were soaring.

In April of 2006, the provincial government told the project managers to carry on with the existing budget, which had by then ballooned to $615 million, without cutting the scope of the project — even though Victoria knew at that point that the budget numbers were a complete fiction.

Even though this government knows all about risk transference — transferring financial risks to the private sector through public-private partnerships — it failed to create a contingency fund for the risks with this massive public project.

At the same time, the acting auditor general noted that the government failed to provide the board with directors competent to handle a project of the scope of the convention centre.

The province now says it has addressed the issues raised by Price, with a fixed contract for completion and new professional management.

The provincial government has yet to explain why it waited until the project soared hundreds of millions over budget to take what should have been these necessary first steps.

© The Vancouver Sun 2007

 

Study seeks participants in multiple sclerosis drug test

Pamela Fayerman
Sun

An old-fashioned, inexpensive antibiotic, commonly used to clear up pimply faces and bacterial infections, is about to be put to the test as a weapon against multiple sclerosis.

A $4-million study will try to confirm that minocycline pills can help stop MS in its early stages from progressing.

Up to 40 B.C. residents are being sought for participation in the B.C. part of the trial, being conducted by the University of B.C.‘s MS clinic. Two hundred individuals elsewhere in Canada will also take part.

Dr. Tony Traboulsee, a neurologist at the MS clinic, said the trial stems from animal research done by a former UBC scientist, V. Wee Yong, showing that minocycline — a member of the tetracycline family of antibiotics — has the ability to inhibit the activities of an enzyme and cells that initiate MS attacks, and that it has anti-inflammatory action that may protect myelin, the protective sheath around the nerve fibres of the brain and spinal cord.

Yong, a professor of oncology and clinical neurosciences, is now at the University of Calgary, the centre leading the two-year minocycline trial, which will begin on Jan. 1.

Yong’s earlier research, published in the journal Brain in 2002 and 2003, was the springboard for a small pilot trial in which Yong and his Calgary co-researchers gave minocycline to 10 MS patients.

Their data, published in 2004, showed minocycline had a profound effect in decreasing brain lesions in MS patients, as evidenced by brain-imaging scans.

Earlier this year, at the American Academy of Neurology meeting in Boston, the same Calgary-based researchers presented as-yet unpublished findings in another trial (also including Vancouver patients) using minocycline taken in combination with an injectable MS drug called Copaxone.

That nine-month trial, according to Traboulsee, showed “a trend towards improvement” in those who took the combination, but he said the patients in that study had more advanced disease and the theory is that minocycline is most beneficial at the outset of disease symptoms, when it can actually halt progression.

In 2001, American and German scientific collaborators reported in the Annals of Neurology that minocycline given to rats with a disease mimicking MS had a helpful effect. The authors of that study postulated that minocycline had anti-inflammatory action that was as beneficial against MS as it is with rheumatoid arthritis, another autoimmune disease for which the drug is already used.

There are nearly 9,000 MS patients in B.C. Minocycline is not yet recommended for them because it has not yet been validated in large-scale trials like the one being planned.

Traboulsee conceded in an interview that the challenge in enrolling trial participants for the study is that they must be quickly referred to the study, by their family doctors, opthalmologists or other specialists, within 90 days of their first MS symptoms. Those symptoms may include any of the following:

– Loss of vision in one or both eyes that lasts at least 24 hours.

– Loss of feeling in leg(s) or arm(s) that lasts at least 24 hours.

– Double vision for at least 24 hours.

– Loss of balance lasting at least 24 hours.

The trial will exclude anyone who waits longer than three months after the first symptoms, which means doctors must maintain a high index of awareness about the trial and its time constraints. Those who already have been diagnosed with MS will not be eligible for the trial.

“The benefits of minocycline are straightforward,” said Dr. Luanne Metz, principal investigator in the trial and director of the Foothills Hospital MS Clinic in Calgary.

“It’s relatively cheap [$800 per patient per year compared with other drug treatments that can cost up to $40,000 a year], has few side effects and can be taken in pill format,” Metz said. “The aim of our research is to see if this common drug can reduce the occurrence of further disease activity in people who have experienced an initial attack of MS symptoms, and who are at high risk of progressing to definite MS.”

Metz said two-thirds of people who have an initial attack of MS symptoms will be diagnosed with MS within six months, but if minocycline is used at the outset of symptoms, “we believe we can reduce this number.”

Traboulsee, who is on the clinical steering committee for the trial along with UBC radiologist Dr. David Li, said while long-term antibiotic use may lead to the development of antibiotic resistance, it is not considered a major concern in the MS trial because the drug is not being used to treat infection.

On a lighter note, Traboulsee noted that minocycline is often prescribed for acne, and participants in the pilot study commented that their skin looked lovely while taking the pills.

“We can’t use that as a selling point to promote the trial,” he said, “but certainly, anecdotally, that came up often.”

The minocycline trial, sponsored by the MS Society of Canada, is also going to run at the MS clinic at Burnaby Hospital, where the site investigator is neurologist Dr. Galina Vorobeychik.

© The Vancouver Sun 2007

Auditor-general’s report says government knew about cost overruns 18 months ago

Derrick Penner and Jonathan Fowlie
Sun

The provincial government knew 18 months ago there were “significant cost pressures” that could push the Vancouver convention centre expansion over the $615-million budget approved for the project at the time, according to a B.C. auditor-general’s report on the project.

Yet project and provincial officials publicly stuck to the $615-million figure until February, when Ken Dobell, then chairman of the Vancouver Convention Centre Expansion Project (VCCEP) Corp., told The Vancouver Sun the actual cost would be “in the range of $800 million.”

In July, cabinet approved a final $883-million budget, but acting auditor-general Errol Price said Thursday he can’t provide an assurance the project will come in at that amount because its “estimates of future costs are built on assumptions” that there will be no further changes before completion.

In a report released Thursday, Price said in April 2006, VCCEP briefed Minister of Tourism, Sports and the Arts Stan Hagen and Treasury Board chairwoman Carole Taylor on the cost pressures the project faced after Treasury Board’s approval of the $615-million budget in July 2005.

VCCEP’s construction manager, PCL Constructors Westcoast Inc., had called for bids on significant parts of the project as part of its attempts to nail down a specific cost for a fixed-price contract, and those bids came in about 25 per cent over budget. The first negotiations for a fixed-price contract failed.

In an interview, Price said he “would hesitate to say” government knew VCCEP was going to blow its budget.

“What we do say is that it was clear to all, including to the shareholder [Hagen‘s ministry] that there were significant cost pressures,” Price said in the interview.

Price added that VCCEP’s monthly progress reports “presented a rosier picture [of the project’s cost] than was actually the case.”

That’s because VCCEP only included information about contracts for work that had already been let, and estimates that fell within the budgets that had already been approved rather than estimates of actual cost escalation.

In his report, requested in late February by the VCCEP board to review the project’s governance and risk management, he made only one recommendation. It was that the corporation ensure monthly project reports include estimated costs to complete the project rather than forecasts “that only go to the approved project budget.”

He said the corporation should include details about assumptions that underlie the estimates, status of the significant risk factors that it is managing and a range of cost estimates if assumptions were to vary from the project plan.

Hagen, the minister responsible for the project, was attending to a family matter Thursday and was absent from the legislature.

It fell to Taylor, also finance minister, to answer questions on the project. She said government has “had flags up” about cost pressures on the project the entire time she has been finance minister, and pressed VCCEP to “to really get them to focus on making the budget work.

“I believe we were doing our due diligence by constantly sending [VCCEP] back [to look] for options and not accepting that there wasn’t something that could be done about it and pushing for fixed contracts and pushing them to get assurances on supplies,” Taylor said.

She added that government has confidence in David Podmore, a prominent Vancouver developer, who was named to chair VCCEP’s board in April. He replaced Ken Dobell, Premier Gordon Campbell’s former deputy minister and until recently a special adviser to the premier’s office.

“At this point, with [Podmore] in charge and with the [tourism] minister working very closely with him, we are confident the budget that has now been before treasury board and cabinet, and approved, will be the budget that gets the job done,” she said.

New Democratic Party leader Carole James called the project a “boondoggle,” saying the auditor-general’s report proves the Liberal government has made a mess of the project.

“The auditor-general points very clearly to the premier and this government who mismanaged this entire project,” James said. “They didn’t have a design and yet they started building the project. There was no clear management of this project.

“From the start, this has been mismanaged and the government can point fingers everywhere it wants but the auditor- general was very clear — the finger points directly at the premier and this government.”

James also seized on the auditor-general’s statement that there is no guarantee $883.2 million will be the final cost.

“It’s impossible for us to believe anyone from this government when they stand up and tell us anything to do with this project,” James said in question period. “The premier and every minister on that side have lost credibility on this entire project on behalf of the taxpayers of British Columbia.”

Maureen Bader, B.C. director for the Canadian Taxpayers Federation, was also critical of government’s management of the convention centre project, saying “politically motivated building changes and the rush to finish were important contributors to out-of-control costs.”

Price said the purpose of his review was not to assign blame for the convention centre expansion’s massive cost overrun, but rather to objectively detail what happened to increase costs and why.

In his report, Price said VCCEP “used appropriate governance and project-management frameworks,” although the formal project reporting has been incomplete.

His report said VCCEP faced a “perfect storm” of conditions that caused the project’s costs to skyrocket:

– A tight timeline to have the convention centre expansion completed prior to the 2010 Olympics, which compelled VCCEP to start construction before a detailed design was complete.

– Changes to include additional public amenities that increased the scope and budget of the project.

– Construction-cost inflation of 11 per cent a year during the project, almost triple the four-per-cent estimate in the project’s first $565-million and subsequent $615-million budgets.

In a response to Price’s report, Podmore wrote that VCCEP has made several changes, including adding experienced construction-sector representatives to the corporation’s board and reorganizing aspects of its management.

He also noted that the new board has concluded a fixed-price contract covering 85 per cent of the project.

Podmore said he has done a full review of the budgets and schedules, and is confident the project will come in on the new budget.

“I have a very high level of confidence in the budget, but it is going to require constant vigilance and attention by myself and the new owners reps I’ve put into place,” he said.

The centre is scheduled to open in March 2009.

© The Vancouver Sun 2007