SNC-Lavalin announces new operating structure; Ottawa LRT woes remain

28 March 2019 - 12:00 am UTC

SNC-Lavalin announced a new operating structure aimed at simplifying and de-risking the business on 28 March.

The new organizational structure will position the company for “further improving project delivery, driving sustainable growth and more consistent cash flow generation,” President and CEO Neil Bruce said in the announcement.

The company has introduced a new project oversight that breaks the organization into four key sectors: engineering, design and project management (EDPM), infrastructure, nuclear and resources.

The new EDPM sector combines the Canadian and global sectors in order to bring the services together and build collaboration across teams. Philip Hoare will succeed Nick Roberts as president of EDPM 1 May.

Infrastructure will comprise of the infrastructure construction, operations & maintenance, and MENA infrastructure business units and be led by Jonathan Wilkinson. The nuclear business will stay largely the same.

The resources business will combine services in oil, gas, metals and mining in order for SNC to better serve the cyclical markets. Mining & metallurgy is now focused on winning studies, EPCM scopes and design and owners engineering, according to the release. The entire sector will be led by Christian Brown until Craig Muir joins the company 8 April.

The project oversight function will operate and report directly to Bruce and is responsible for ensuring delivery and execution across the four sectors. This extra structure has been added as a way to drive consistency and assess risk and enhance ability to foresee and fix project-related issues in a timely fashion.

Other changes that the company is making in order include consolidating the technology ventures and changing leadership of the capital business, which will now be led by Stephanie Vaillancourt.

SNC-Lavalin is currently facing fraud charges stemming from its operations in Libya. The charges were filed by the Canadian law enforcement in 2015; if convicted, the company may face a 10-year ban on bidding for federal contracts.

Trillium Line project

This organizational change announcement comes on the same day the Mayor of Ottawa, James A. Watson, announced he would support the auditor general’s announcement to look into the procurement process of the Trillium Line LRT, according to multiple news reports. 

Councilmember Shawn Menard had filed motion to ask the auditor general to look into the selection process that saw SNC-Lavalin win the CAD 799.4 DBFM contract for the Trillium Line extension.

Concerns have spurned from a CBC News report that the SNC bid came in CAD 240m more than the city had planned for in its budget and that it failed to meet the technical bar. Officials promised to save the city CAD 100m over its 27-years maintenance contract. Additionally, multiple sources reportedly told CBC News the company failed to meet the minimum technical threshold necessary to win the contract.

The move by Mayor Watson strayed from his prior position. During a 22 March news conference, Watson said the entire process had been overseen by a fairness monitor.

The Trillium Line extension will bring the existing line 14km south to Limebank Road, building eight new stations and adding a 4km spur to the Ottawa Macdonald-Cartier International Airport.

 

Read more