Canada's British Columbia moves ahead with mega dam project

The government of the western Canadian province of British Columbia said on Monday it would proceed with a large hydroelectric dam project approved and put into construction by the province's previous government.

Cancelling the Site C dam project would cause electricity rates to rise and cost C$4 billion (US$3 billion) due to money already spent and remediation costs, reducing room to invest in schools and hospitals, provincial premier John Horgan said.

The government also raised the projected cost of the project to C$10.7 billion, up from a previous estimate of C$9 billion.

"It's clear that Site C should never have been started," Mr Horgan said in a statement.

"But to cancel it would add billions to the province's debt - putting at risk our ability to deliver housing, child care, schools and hospitals... And that's a price we're not willing to pay," Mr Horgan said.

The project will flood more than 5,000 hectares (19 square miles) of land in northeast British Columbia, the equivalent of about 5,000 rugby fields, spurring opposition from local farmers and indigenous groups.

The continuation follows a review by the British Columbia Utilities Commission released last month, which found the massive project was already over budget and a year behind schedule.

The NDP government, which came to power in July, had requested the review to help it decide whether the project should go ahead.

British Columbia's former Liberal government approved the project in 2014, saying it would help meet a surge in electricity needs over the next 20 years.

Companies from around the world are involved in the construction. Peace River Hydro Partners, jointly owned by Acciona SA and Samsung C&T Corp, was awarded the C$1.75 billion contract for civil works, and is bidding for the generating station and spillway contract.

Canada's Aecon Group Inc is part of a joint venture also bidding on a generating station and spillway contract.

Canada's Atco Ltd was awarded an eight-year, C$470 million contract for worker accommodations, while privately held German company Voith Hydro won the C$470 million contract for turbines and generators.

REUTERS

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