Mayo-Dawson City Transmission System Project

Auditor General finds poor project management and significant cost overruns

Whitehorse, 7 February 2005—The Yukon Energy Corporation did a poor job of planning and implementing the Mayo-Dawson City Transmission System Project, according to a report by the Auditor General of Canada provided today to the Speaker of the Yukon Legislative Assembly. The Auditor General undertook this audit at the request of the Corporation’s Board of Directors.

“From the beginning, this project was poorly managed by the Yukon Energy Corporation,” said Ron Thompson, the Assistant Auditor General responsible for the audit. “There were significant delays and cost overruns.”

The Corporation indicated that the total cost of the project would be about $36.2 million, representing a cost overrun of about $7 million. But the audit concluded that the final cost may be even higher.

The audit identified a number of problems:

• Potential costs were not clearly identified and budgeted for;
• The Corporation did not have the required experience and expertise;
• The Corporation did not apply good project management practices and numerous problems were encountered during project implementation;
• Many contracts were awarded without competition with no explanation to justify this approach; and
• Cost overruns were not approved or authorized.

“The Corporation did not follow basic project management principles,” said Mr. Thompson. “In the end, it does not appear that the Corporation received the first class design and construction work that it contracted for.”

The Yukon Energy Corporation is a subsidiary of the Yukon Development Corporation, a government corporation owned by the Government of Yukon. It undertook the project to replace diesel-generated power with hydro power to provide electricity to Dawson City customers.

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To obtain the Report “Mayo-Dawson City Transmission System Project”, please contact:

Communications
Tel.: (613) 952-0213, ext. 6292
E-mail: communications@oag-bvg.gc.ca