OLG stops $30M casino building payment

The troubled Ontario Lottery and Gaming Corp. has stopped payment ontwo casino building projects worth about $30 million while internalauditors investigate the winning general contracting company’s “biddingpractices.”

The troubled Ontario Lottery and Gaming Corp. has stopped payment on two casino building projects worth about $30 million while internal auditors investigate the winning general contracting company’s “bidding practices.”

At issue are a series of “surcharges” levied by general contractor Govan Brown on the many subtrades it has hired to expand casino and slot machine properties in Brantford and Ajax. The five individual surcharges total 7.5 per cent of each subtrade’s contract, and could add up to about $2 million.

Bid documents obtained by the Star show Govan Brown instructs subtrades to include surcharge amounts in their bids for such things as site cleanup. One subtrade contacted by the Star said he dutifully included the surcharges in his successful bids. Although his company does the site cleanup or other work, he said they do not receive the surcharge money.

The OLG said it never approved these surcharges. OLG spokesperson Allison Sparkes said yesterday resolving the matter with Govan Brown is a priority for the crown agency.

She said allegations “regarding (Govan Brown’s) bidding practices” were first received July 22. A review began immediately and then August 21 the OLG met with Govan Brown officials and told them payment was being stopped pending outcome of the probes.

Govan Brown’s chief financial officer, Eric Wegler, emailed the Star yesterday saying he welcomes the audit. “Previous audits, which are routine and which we welcome on any project, have always demonstrated and confirmed our unparalleled transparency and high ethical standards,” he told the Star.

 
 
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