Alberta roadbuilders take province to court after $500M worth of contracts sold to B.C company

The contracts include snow removal and other maintenance activities on nearly half of the province’s highways. PHOTO: Getty Images

EDMONTON—A group of five Alberta roadbuilders say the province has forced its hand following a “costly and potentially illegal” government decision to transfer more than $500 million worth of highway maintenance contracts to a B.C. company.

The five competing contracting firms filed a joint application with Alberta’s Court of Queen’s Bench for judicial review of a deal that will allow Emcon Services Inc. to assume highway maintenance contracts originally held by Carillion Canada.

Emcon was recently granted approval to buy the contracts by the Ontario court overseeing the sale of Carillion’s assets. The Canadian arm of the international construction services firm was granted creditor protection in January following the collapse of its U.K. parent company.

Details of the Alberta government’s deal with Emcon have yet to be released, but Transportation Minister Brian Mason said the agreement ensures those highway maintenance operations will continue uninterrupted. The contracts cover maintenance and snow removal services on about 43 per cent of the province’s highways.

He added that the sale was the most cost effective option considered by the province.

Alberta Highway Services Ltd., Carmacks Maintenance Services Ltd., LaPrairie Works Inc., Ledcor Highways Ltd. and Wolker Stevin Highways Ltd. disagree.

“We stand ready and able to take over the Carillion contract today,” the group said in a joint statement.

Related: Road rage: Albert roadbuilders feud with province over $500M deal involving B.C. firm

The companies have called on Mason to disclose concessions granted in the deal, such as an extension to the term of the contracts, a higher price for the work, or freedom from environmental liability.

Those concessions could delay public tender processes, raise the cost of highway maintenance and shift risk to taxpayers, according to the roadbuilders.

“This is not just an asset sale as the minister has claimed,” the group said. “This is a large, sole-sourced piece of business with Alberta Transportation, funded by Alberta taxpayers.”

Mason said the sale prevents layoffs of Carillion employees, despite promises by the roadbuilders to hire those workers.

Emcon committed to keep all current Carillion staff and existing labour agreements, which includes 300 jobs during the winter and up to 500 jobs in the summer.

“We’re hiring 10 to 12 mechanics and mechanical apprentices and between 60 and 80 new winter equipment operators,” said Frank Rizzardo, Emcon president and general manager.

“We have no objection to Emcon or any other company entering Alberta under a fair, competitive and transparent process,” the joint statement reads. “We ask only that experienced, proven Alberta maintenance companies be given an equal opportunity to compete for business in Alberta.”