The date of the delivery of phase 1 of the new Centre hospitalier de l’université de Montréal (CHUM), scheduled for April 2016, has been largely exceeded, note DBRS in its report. GSA now expects to finish the work in no later than June 2017, according to the spokesperson of the consortium, Stéphane Mailhot.
Some parts of the project could be delivered before. Mr. Mailhot confirmed to be in discussion with the CHUM to be able to establish “which will be delivered” as soon as the end of march 2017.
Director of communications in the office of modernization of the university hospital of Montreal, Martin Viau explained that one of the two towers of the new hospital could, for example, be delivered first so that the CHUM can begin its “activation” before next June. “But this will need to be ready. An independent certifier will decide if the delivery can be made or not depending on the conformity of the installations, ” explains Mr. Viau. As soon as the certifier authorizes the delivery of certain parts of the project of the CHUM, the government will have to begin paying a portion of monthly rent of $ 11 million provided for in the contract in the public-private partnership.
A DBRS rating also reveals that the CHUM and the CSM are currently working on ” an agreement [accommodation agreement] which would reduce the scope of remaining work to achieve completion of the phase 1 “.
Mr. Viau explained that the parties attempt to agree on a ” delayed work “, work that could not be completed at the time of the taking of possession of the hospital, but without affecting its activation. For example, tunnels connecting some of the buildings of the CHUM may not be completed, ” said Mr. Viau.
” But all the major elements, essential to the functioning of the hospital, must be functional for the activation. “
trade union Advisor to the Fédération de la santé et services sociaux (FSSS-CSN), Jean-Pierre Daubois expressed concern that the current negotiations do not diminish the scope of phase 1. “Accept-t-a phase 1, less completed than what was planned ? Will there be bits of hospital non-functional ? It is necessary to ask a lot of questions, ” he said.
QUALITY REQUIREMENTS
In its rating, DBRS also expressed doubts on the possibility that the work could be completed as early as march 2017. According to the rating agency, a certain “uncertainty” hovers over ” the probability that the builder completes the work in time.”
As of April 2016, DBRS had raised concerns about the delays increasing in the project of the CHUM, and noted that a new haircut was possible. Since, even if the phase 1 is completed to 99 %, ” some of the remaining items are critical and require a lot of time to realize “, written by DBRS.
A lower credit rating can increase borrowing costs for manufacturers, ” said Jean-Pierre Aubry, a fellow guest at the Center for interuniversity research analysis on organizations (CIRANO). For him, the haircut is the “logical continuation” of the many delays and problems on the construction site of the CHUM.
” This new haircut puts even more pressure on this company, for which it becomes more expensive to borrow. “
Mr. Mailhot argues that this downgrade from DBRS has “no impact” on CSM. “The release of DBRS is used to inform the holders of the securities,” he said.
DEADLINE : OCTOBER 2017
For the teacher-researcher at the Institut national de la recherche scientifique Pierre J. Hamel, the DBRS rating is a ” serious warning “. “It indicates that if future deadlines are not met, it will go wrong for the consortium,” he said.
In the document, one speaks of the cut-off date ultimate the 22 October 2017. If, at that date, the phase 1 is not yet supplied in full, the contract may downright be terminated. Mr. Mailhot noted, however, that this date “ultimate” does ” not part of our scenarios “. “Currently, all efforts are being made to complete this project of high quality before the beginning of June 2017,” he said. Mr. Viau is responsible for him not to see “no risk” that the site stretches past June.
Considering the “history” of long negotiations in the project of the CHUM, and the ” tenuous relationship with the hospital “, DBRS notes that the credit rating of MSC could again be lowered in the event of non-observance of the timelines. The firm announced, however, that this note could also be increased if phase 1 is delivered on time.
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