A private consortium is suing the Quebec government and the McGill University Health Centre for $330 million, claiming that it had to carry out extra work to complete the $1.3-billion superhospital on time — additional costs that it says were not covered under the initial contract.
Engineering conglomerate SNC-Lavalin (TSX:SNC), the lead partner in the consortium, announced the lawsuit in a statement Friday morning, arguing that it had no choice but to go to court after more than two years of negotiations with the MUHC and the government “have not been fruitful.”
The contract to build the superhospital and maintain it until 2044 was the subject of a criminal investigation, and led to charges against three former high-ranking SNC-Lavalin executives who are alleged to have made $22.5 million in bribes to the ex-director-general of the MUHC, Arthur Porter, and several of his associates. Porter died in Panama in June 2015 while contesting his extradition to Quebec.
The contract was also the first attempt by the Quebec government to proceed with a large-scale public-private partnership (PPP) to build a hospital. Former Premier Jean Charest approved the PPP model, expressing confidence that such a contract would transfer the risk of any cost overruns entirely to the private sector.
But in its statement Friday, the consortium, known as the McGill Healthcare Infrastructure Group, contends that it “is entitled to compensation from the MUHC to cover costs associated with the additional work that was requested and the need to fast-track work in order to prevent any delays to the project.”
The consortium added that it “delivered a quality, functional complex to the MUHC in accordance with the conditions and schedule set out in the agreement.”
However, soon after the superhospital opened at the Glen site in Notre-Dame-de-Grâce last April, the MUHC had to contend with as many as 14,000 glitches, including faulty wiring in operating rooms and sewage bubbling up from floor drains in the birthing centre.
SNC-Lavalin initially sought more than $170 million in additional compensation, and during tense negotiations with the MUHC, the hospital network waited several months to take possession of the facilities.
A spokesperson for the MUHC was not immediately available for comment.
