MUHC settles with SNC-Lavalin over cost overruns

The McGillUniversity Health Centre (MUHC) has reached an out-of-court settlement to the tune of $108 million with the SNC-Lavalin-led consortium that won the contract to build the Glen site superhospital.

TheMontrealengineering gianthad been suing theMUHCfor $330 million over the contract to build the superhospital, alleging last-minute changes to the contract significantly boosted construction costs.

In a release fromQuebec's Health Ministry, a spokesperson confirmed the settlement with the McGillHealthcare Infrastructure Group (MHIG) a consortium composed ofSNC-Lavalinand its U.K. partner Innisfree adding that the agreement was the product of four months of mediation.

In the original lawsuit,SNC-Lavalin alleged that theQuebec government and the MUHCsignificantly changed specifications and surface-area requirements forthe new Glen site hospital after the contract was signed and construction was underway.

The Health Ministry said thatmuch of the $108 million payoutwill go toward covering fees already owed.

According to a statement issued by SNC-Lavalin Monday, the consortium "is responsible for managing the hospital centre's assets and ensuring its upkeep until September 30, 2044."

$125M for the CHUM

In a separate release also issued Monday morning, the ministry's office responsible for modernizing Montreal hospital centres disclosed the details of another settlement this one concerning the Centre hospitalier de l'Universit de Montral (CHUM).

The French superhospital reached a $125-million deal with its builder, the CollectifSantMontral, which had been suing the CHUM for $367 million over delays.

While the settlement was reached out of court a year ago, the details weren'treleased until after negotiations between the MUHC and SNC-Lavalin were completed.

The CSN labour federation,which represents almost 300,000 workers, slammedthe settlements, calling it evidence that the public-private partnerships responsible for the construction of both superhospitals"will collectively cost us dearly over more than 30 years."

"The government maintains thatbudgets are being respected for these projects," said the CSN in a statement. "But the real costs are only going up."