Completing the Trans Mountain pipeline expansion will cost Canadian taxpayers up to C$1.9 billion more than Kinder Morgan has previously disclosed, an increase of about 25%, and will take a year longer than previously expected, according to corporate documents filed yesterday with the U.S. Securities and Exchange Commission.
The revised project cost of up to $9.3 billion comes on top of the $4.5 billion the Trudeau government has already anted up to buy Trans Mountain from the Houston-based pipeliner. And Canadian economist Robyn Allan told The Canadian Press that price will seem like a steal compared to the likely final cost of the project.
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Kinder Morgan’s SEC filing “looks at a few different construction cost scenarios as part of a fairness evaluation of the sale offer to the Canadian government,” CP reports. “The most expensive scenario pegs construction costs at $9.3 billion, taking until December 2021 to complete—a full year after the current timetable of December 2020.”
Finance Minister Bill Morneau “won’t say how much Ottawa expects to spend on construction because he fears that would affect negotiations with construction contractors which are now under way,” the news agency notes. An official in his department said the figures in the document don’t reflect the final project cost the government expects.
But Allan cautioned that “this is the least it’s going to cost,” adding that she’s frustrated Canadians aren’t getting the same level of disclosure from their government that investors are receiving from Kinder Morgan.
“It’s frustrating, it’s really, really frustrating that at their core has been a murky and dishonest transaction with so much money involved,” agreed MP Nathan Cullen (NDP, Skeena-Bulkley Valley). “I worry about what we’re going to get stuck with.”
“Morneau’s official said as soon as construction contracts are in place the government will freely release an official cost update, which he said should happen no later than next winter,” CP reports. Kinder Morgan shareholders are scheduled to vote on the deal August 30.