SNC-Lavalin city's top choice for $600M LRT expansion

SNC-Lavalin is the City of Ottawa's top choice to build the $600-million Trillium Lineextension duringthe second phase of Ottawa's light rail project, CBC News has learned.

The Montreal-based company, currently embroiled inpolitical controversy, is one of three pre-qualified bidders for the southern extension, which would add 16 kilometres and eight new stations, including a spur to the Ottawa International Airport, by 2021.

According to multiple sourceswith knowledge of the issue,SNC-Lavalinhas emerged froma competitive bidding process against two international consortia as the city's preferred proponent. A technical briefing on the awarding of the contract is expected at City Hall next week, and council debatethe choice at a meeting onFeb. 27,with a final vote set for March 6.

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The company is already a leading partner in Rideau Transit Group (RTG), which is constructing the east-west Confederation Line a project that appears to be running at least a year late. And, as part of RTG, will also be responsible for maintaining the system, worth more than $2 billion over the contract's 30 years.

Under the rules forStage2 bidding, none of the major partners in RTG were allowed to bid for the Confederation Line extension, as they were thought to have an unfair advantage.

RTG players were allowed to bid for the north-south Trillium Line project, however.Only SNC-Lavalin did so, under the name TransitNEXT.

The company declined comment for this story.

Choice likely to raise eyebrows

The choice of SNC-Lavalinis sure to raise eyebrows.

The company is at the forefront of a political furorthat involves, among other headline-grabbing elements, whether it would have to face criminal charges of fraud and corruption in connection with payments of almost$48 million to Libyan officials, and allegations it defrauded Libyan organizations of an estimated $130 million.

If found guilty,SNC-Lavalincould be blocked from bidding on federal government contracts for a decade.Instead, the company asked forthe public prosecutor to enter into negotiations toward a remediation agreement. SNC-Lavalin has even filed for a judicial review of the public prosecutor's decision not to meet with the company.

As well, several former SNC-Lavalinexecutives have pleaded guilty in a corruption case involving the $1.3-billion contract to build Montreal's McGill University Health Centre.

And just this week, reports confirmed that theRCMPare investigating whether high-level officials at SNC-Lavalinwere aware of kickback paymentsmade in relation to Montreal's Jacques CartierBridge.

'No difficulty' with SNC-Lavalin, mayor says

Asked earlier this week about the beleaguered company'sinvolvement in the $2.1-billion Confederation Line project, and possible contention for theTrillium Line contract, Mayor Jim Watson said he had no concerns.

"We have had no difficulty, obviously, with themfrom an ethics point of view here in Ottawa," Watson said.

Watson said staff had assured him that SNC-Lavalin'spotential involvement in LRT'snext stagewould put neitherthe city nor local taxpayers at risk.

Mounting financial pressures

Apart from ethical considerations, the choice of SNC-Lavalin for the Trillium Line project should prompt questions about the company's financial future.

Since it's been facing criminal prosecution, SNC-Lavalin share prices have plummeted. Its chief executive said late last year the simmering scandalhas cost the company $5-billion worth of business.

Just this week, debt-rating agency Standard & Poor's downgraded SNC-Lavalin,which has significantly slashed its own earnings projections twice recently.