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infighting delaying Alberta supernet

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SuperNet late, over budget -- Axia High-speed network was held up in court Paul Marck The Edmonton Journal Tuesday, March 18, 2003 ADVERTISEMENT EDMONTON - The $300-million Alberta SuperNet project, subject of recent court proceedings and delays, will neither be completed on time nor on budget, according to Axia, one of its partners. The Alberta government says it has a deal, and prime contractor Bell West says it is moving aggressively to deliver the ambitious high-speed Internet network linking more than 400 Alberta communities by July 2004. But Axia SuperNet, the Calgary-based Alberta partner on the Bell West project, has said untimely delays mean part of the project won't be complete until late 2004 or 2005 and that cost overruns could be as high as $50 million. Work on the rural part of the project, which Axia was building, ceased Jan. 20, when it filed an injunction application against Bell West. Axia says it resumed work last week. Drew McNaughton, president of Axia SuperNet, said there were scheduling and approval problems between it, as main subcontractor, and Bell since last spring. "Work should never have stopped," McNaughton said in an interview. Much of the northern portion of the rural project is through muskeg, which is inaccessible in summer. The delays meant there was no winter design work done along a 2,000-kilometre northern Alberta wireless route for the project to areas such as Fort Chipewyan, McNaughton said. "There are others, for the same reason, quite a few will not happen until the end of '04," McNaughton said. The project is also running over budget, McNaughton said. Under terms of its contract, Bell West is liable for meeting the project's budget requirements. McNaughton estimates the rural portion of the network will cost an additional $30 million. Bell could also be on the hook for an additional $20 million to bring the urban base portion of the network in on time, McNaughton said. Jamie McNaull, spokesman for Bell West, said it will now build both the urban and rural parts of the network and is working to deadline. As a result of the legal proceedings, Axia is no longer involved in the building of the rural network, McNaull said. "Based on the decision, Bell is moving ahead to build the network and has assumed responsibility for the extended area as well." Bell has worked aggressively to build local access on the base, or urban, network, with fibre to 39 sites and central offices to 18 of 27 communities, McNaull said. He said significant progress is also expected to be made on the rural network. "Intense efforts are underway to increase the rate of progress on the extended area and Bell is confident it will complete this portion of the network, as per its obligations to the government of Alberta," McNaull said. Bell has no concerns about completing the northern Alberta wireless portion of the network, he added. SuperNet was commissioned by the Alberta government in 2001 in a complex series of agreements between the province, Bell and Axia. Axia sought an injunction against Bell West earlier this year, claiming it was wrongly terminated as subcontractor in the rural portion of the master agreement. Court of Queen's Bench Justice Del Perras ruled Feb. 27 that Bell West and Axia must use dispute resolution mechanisms and arbitration measures, contained in their master agreement, to resolve their differences. Alberta SuperNet will link 4,700 government offices, schools, libraries and hospitals to a high-speed Internet network across the province. Alberta Innovation and Science, which commissioned the project, said there has been no indication that Alberta SuperNet won't come in on time or on budget. "We set out a contractual requirement with Bell to have it done in 2004," said department spokesman Jeremy Fritsche. As well, there will be no exposure to taxpayers if the project runs over budget. "The contract's really explicit about that deadline and about the financial commitment, and we're holding to what we have in the contracts," Fritsche said. There is a series of six agreements among the province, Bell West and Axia NetMedia, Axia SuperNet's parent company. Only one of the six, concerning construction of the rural network, is at issue between Bell and Axia. The companies agree that all other contracts remain in force. [e-mail] © Copyright 2003 Edmonton Journal Note:Wi-lan will come into the picture on the northern and remote part of the project.