Quebec pays 233 million to settle litigation surrounding the CHUM and the MUHC

Photo: Jacques Nadeau Archives The Duty

Quebec will pay $ 233 million to settle amicably the disputes surrounding the costs of the McGill university health Centre (MUHC) and the Centre hospitalier de l’université de Montréal (CHUM), two public-private partnerships (PPP).


In a first time, the State will pay $ 125 million to Construction santé Montréal (CSM), the contractor responsible for the construction of the CHUM, which called for a total of $ 367 million.


The second regulation provides for a payment of $ 108 million and the Groupe immobilier santé McGill (GISM) — a consortium formed by SNC-Lavalin and Innisfree, which will abandon its two lawsuits of $ 360 million surrounding the construction costs of the MUHC.


The agreement with MSC for the CHUM had been concluded there was more than a year, but the amount had not been unveiled to have no impact on the negotiations in the case of the MUHC, says the Office of the executive director of the modernization of the university hospital centres (UHC) of Montréal. It covers the two phases of the project, including the one that has to be completed in 2021.


“As negotiators from the public, we felt that it was better to try to find common ground […] rather than go and debate in front of a court for long years and at high cost,” explained the executive director of the modernization of the university hospital of Montreal, Clermont Gignac.


According to the Bureau, the budget of the new CHUM, of approximately $ 3 billion, will not increase in spite of the settlement of $ 125 million.


Cost overruns


Alleging cost overruns SNC-Lavalin had decided to continue with the MUHC and the quebec government in 2016 in order to be compensated for the additional amounts to be incurred in the design and construction of the hospital complex of 1.34 billion, has opened its doors in 2015.


MIHG is responsible for the management and maintenance of the site until September 30, 2044.


In spite of the $ 108 million paid to the consortium, the Office of the executive director says that the budget approved in July 2010 has been “respected” and that there are no ” cost overruns in the folder of the modernization of the MUHC “.


By way of a press release, SNC-Lavalin said to be “very pleased” that a settlement has been reached at the end of a mediation between the parties involved.


The analyst Derek Spronck of RBC capital Markets, described the agreement as “positive” given that it demonstrates that the engineering firm in quebec is able to put behind it projects that are deemed problematic.


The controversial construction site of the MUHC has been qualified in the past of “the greatest fraud of corruption of history” in Canada by the Unité permanente anti-corruption because of allegations that former executives of SNC-Lavalin allegedly paid $ 22.5 million in bribes in order to win the contract.


This matter is currently before the courts.