Commentary: The company(ies) BC Hydro keeps

by Dermod Travis,


Another month, another Site C contract and once again with one of those almost – but not quite – Canadian companies.

On April 6, Canadian Press quoted Premier Christy Clark as stating “Montreal-based Voith Hydro Inc. will design, supply and install six turbines, six generators and associated equipment.”

Voith would be more accurately described as a family-owned, German-based company with operations in Montreal and dozens of other locations around the world.

May seem picayune, but it’s not the first time BC Hydro has taken liberties with postal codes.

In a news release last November, it announced the selection of Peace River Hydro Partners as the preferred proponent for the $1.75 billion Site C main civil works contract.

Peace River Hydro Partners is comprised of Samsung C&T Canada, Acciona Infrastructure Canada and Petrowest.

In the release BC Hydro stated: “The Petrowest group of companies operates out of Northeast B.C. and Western Canada” and “houses four divisions in Fort St. John.” The politic way of trying to avoid saying that its head office is in Calgary, Alberta.

Acciona Infrastructure Canada is described as a “wholly-owned Canadian subsidiary of Acciona S.A.” that’s “headquartered in Vancouver,” neglecting to mention that the parent company is headquartered in Madrid, Spain.

At least it didn’t try to skirt Samsung C&T’s South Korean connection. Kind of tough with that one.

BC Hydro has also taken a bit of artistic license in the corporate description section of its Site C news releases.

Left out of its December release – announcing the awarding of the $1.75 billion contract – was any mention of collusion and bid-rigging by Samsung C&T, the ongoing investigation by a Spanish magistrate and anti-corruption prosecutors into “allegations of misappropriation of public funds, falsifying documents and money laundering” at Acciona and liquidity issues at Petrowest.

In 2014, Samsung C&T was one of 12 companies fined $45 million by South Korea’s Fair Trade Commission for bid rigging on a railway project; fines totaling $110 million were imposed on it and 10 other companies for a cartel during a separate 2008 bidding process, and it was fined $6.2 million for collusion in the 2009 bidding on a Seoul subway construction project.

Last year, it was banned from bidding on any public works projects in South Korea. A Seoul administrative court has suspended the order pending resolution of a lawsuit filed by the company in response.

There’s that matter Down Under too.

Australian-based Roy Hill Holdings commenced legal proceedings last November against Samsung C&T for breach of contract due to the late delivery of the $5.4 billion Roy Hill mine in Western Australia.

In February, Roy Hill launched a legal action to seize the $235 million performance bond Samsung C&T posted.

A whistleblower at the site claimed that up to 200 white-collar and 457 visa workers were being exploited: “about half of whom are Korean nationals aged under 30, are clocking up more than 84 hours a week and being grossly underpaid.”

Samsung is implicated in the corruption scandal in Brazil as well.

In January, two high-ranking executives at Acciona were arrested as part of the Spanish investigation into allegations of corrupt practices.

Acciona is part of a three member construction team that took a “major hit” on an approach road in Windsor, Ontario when it “agreed to replace 500 prestressed concrete bridge girders due to the use of tack welding of rebar cages during fabrication.”

There is a sliver of good news, though.

Petrowest which had been reported to be living on borrowed time from its lenders – only a few days after BC Hydro awarded the contract – staved off what might have been a messy financial meltdown when it reduced its debt through a $10 million stock placement in March.

None of this bodes particularly well for Site C coming in on time and on budget.

Maybe if it wasn’t in such a rush to reach the point of no return, BC Hydro could have performed a little more due diligence.

Something else it should consider is the OECD‘s Principles for Integrity in Public Procurement, particularly number 10: Empower civil society organizations, media and the wider public to scrutinize public procurement.

Withholding the competing bids for the Site C contract – as BC Hydro has done – doesn’t speak to an open and transparent process.


Dermod Travis is the executive director of IntegrityBC. 

April 19, 2016