Former NWT resident expresses concern about local economic benefit as construction of access road to Sahtu begins

The first phase of construction for Prohibition Creek Access Road will cost $25.5 million, but a longtime Tulita resident wonders how much the project will really benefit the local economy.

The access road is expected to be part of the Mackenzie Valley Freeway Project and will eventually connect the NWT communities of Tulita and Norman Wells.

The first phase, spanning 6.7 km between Canyon Creek and Christina Creek, began Tuesday. It will cost $25.5 million, with the federal government covering three-quarters of the costs.

Norman Wells-based HRN Contracting Ltd. negotiated the contract with the territorial government without competitors. The company is registered under the territory’s Business Incentive Policy (BIP), a program designed to benefit businesses that are owned and operated within the Northwest Territories.

The first phase, spanning 6.7 km between Canyon Creek and Christina Creek, will cost $25.5 million. Phase two will cover the additional 6.3 km. It is not yet clear how much phase two will cost. (CBC News)

A federal and territorial government press release says the project is part of a joint effort to “invest in strategic infrastructure that creates jobs and economic opportunity for Northern businesses.”

But Bobby Clement said he has doubts about how much the locals will benefit.

Clement now lives in High Level, Alta., but grew up in Tulita and runs a Facebook group dedicated to providing updates on the Mackenzie Valley Freeway project, among other Sahtu infrastructure projects.

“Most of the funds that [the] that the government gave to HRN will probably leave the Sahtu and end up in the pockets of southerners or easterners,” he said.

Clement’s comments relate to HRN’s association with Nuna Logistics, a construction and mining company that is 51% owned by the Nunavut Kitikmeot Inuit Association and 49% owned by Alberta-based North American Construction Group. .

HRN president David Hodgson, contacted by phone, said he “didn’t want to say anything about this.”

Pressed on why, Hodgson said that the Prohibition Creek Access Road project “is too new” and that he is “not prepared to talk about it right now.”

The CBC was unable to reach Nuna Logistics for comment.

HRN Contracting committed to spending in the local area, says government

In an email, a spokesperson for NWT’s Infrastructure Department (INF) said contracts negotiated with BIP-registered companies “are expected to generate benefits for companies or residents of the region.”

The spokesperson said that HRN has committed to how much it will spend in the local area on goods, services and labor.

INF said that the details of those commitments could not be disclosed without the consent of the HRN, but that commitments on local spending are enforced through the BIP.

Clement said he’s glad the project is underway, but is “disappointed with the way things have been handled behind closed doors in awarding the job.”

Higher budget a result of inflation, supply chain problems: minister

The Prohibition Creek Access Road project was first announced in 2020 as a 13 km road from Canyon Creek to Prohibition Creek. At the time, the entire project was budgeted at $20 million.

Katrina Nokleby, MLA and former INF minister, stated that the contract award for the access road was the result of “cronyism and corruption” within the territorial government.

Nokleby, who was a minister when the project was first announced, criticized the government for allowing the price of the project to skyrocket so that completing just 6.7km of the road now costs more than $5m more than the original budget to complete. the full 13 km.

“Almost $4 million a mile is bad economics, in my opinion, it’s unheard of,” he told CBC.

“I’m struggling to see how an earthmoving project, which is generally all up north, you know, capacity is costing a lot more depending on the supply chain.

“I don’t buy that.”

INF Minister Diane Archie told the NWT legislature on October 19 that the new higher cost of the project is the result of supply chain issues, inflation, material and labor shortages and rising fuel costs, and that “the allegations of nefarious dealings raised at the House are fundamentally false.”

β€œIt is our hope that this can be celebrated as the important milestone that it is, and that the years of work to get to this point will not be marred by these recent allegations,” he said.

INF said the procurement approach for phase two of the access road, the remaining 6.3km, will be determined prior to construction. The department could not say when phase two will begin or how much it will cost, explaining that it would depend on “additional regulatory approvals and funding considerations.”

Meanwhile, phase one is expected to take 12 months to complete.

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