Home > News > News Releases > City of Saint John and Port City Water Partners reach global settlement to keep $217-million Safe, Clean Drinking Water Project on track and within budget

City of Saint John and Port City Water Partners reach global settlement to keep $217-million Safe, Clean Drinking Water Project on track and within budget

14-May-2019

Residents in Saint John now have some of the safest drinking water in the world, thanks to the priority placed on completing the Safe, Clean Drinking Water Project, the single largest municipal infrastructure project in the history of the Province of New Brunswick. The water meets all national and provincial drinking water standards.

As the $217-million project approaches final completion, Saint John Water Commissioner, Brent McGovern, provided Common Council with an update on the Global Settlement reached with the City’s project partner, Port City Water Partners, after a lengthy negotiation. The settlement deals with all outstanding risks on the project, and keeps the total project cost within budget.

“On any project of this magnitude, disagreements and disputes are expected,” said Mayor Don Darling. “The City’s team has managed the project exceptionally well since construction began in 2016. Through collaboration with Port City Water Partners on all matters of disagreement, we now have an agreement that will ensure the project remains on budget without any additional cost to Saint John Water ratepayers.”

As part of the Global Settlement, the City of Saint John was able to secure a comprehensive full and final release and indemnity on the project up to final completion, when all deficiencies will have been dealt with.

Anyone who has worked in the construction industry will appreciate the significant positive achievement this is for the City of Saint John,” adds Darling. 

The main terms of the Global Settlement include:

  1. Substantial completion will be declared with a small amount of weather dependent work being deferred to the summer months.
  2. The City will make a payment of just over $1.64-million (plus HST) to Port City Water Partners for delay costs.
  3. Port City Water Partners will provide a comprehensive full and final release and indemnity of all claims on the project up to final completion. During negotiations, these claims were valued over $22-million.

How the $1.64-million (plus HST) will be paid without adding cost to the project – The City will begin paying the capital portion of the debt associated with the new Loch Lomond Drinking Water Treatment Facility once substantial completion is declared. Since Port City Water Partners experienced minor delays in the project, the City was able to hold approximately $1.4-million in payments, which was then used during the negotiation as a means to settle outstanding disputes. In addition, the City and Port City Water Partners worked collaboratively throughout the project making changes that resulted in a cost reduction of close to $500,000. This money remains within available project funds and will be used to make the additional $1.64-million payment. 

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