Hhhhhmmmm… $6.6 billion dollars they say?
First, it is good to recognize that the expected cost overruns on large hydro projects are of the order of 56%, likely taking the cost over $10 billion.
The average cost overrun of the 81 large dam projects included in the WCD Cross-Check Survey was 56%.
Dams And Development : A New Framework For Decision-Making
The Report Of The World Commission On Dams, November 2000
http://www.unep.org/dams/WCD/
So let’s say it will likely cost $10 billion, as is, including the expected cost overruns.
However, there are still many substantial costs that have not been included in BC Hydro’s very rough estimate. This figure does not include the necessary upgrading of the design to meet current seismic guidelines which would be extensive considering the instability in the banks of the Peace River at the location of Site C. It also does not include updating the design to fit current environmental and safety guidelines. An example of the latter would be clearing the vegetation to reduce the expected GHG emissions, to reduce the problem of methylmercury bioaccumulation in the fish and to allow for some vague concept of recreation.
"If the project advances to Stage 3, the interim cost estimate would be updated to reflect current market conditions such as commodity prices, and labour prices. In addition, the historical project design is almost 30 years old and would also be updated to reflect current environmental, seismic and safety guidelines, as well as input from public consultation. Due to the increases in modern design and seismic standards, BC Hydro believes these design changes would increase the total project cost."
(Stage 2 Report: Consultation and Technical Review, Fall 2009, page 75
http://www.bchydro.com/etc/
There would also be the cost associated with dealing with the regional landfill which is situated on the safeline. This is a serious concern given that there is significant instability in the banks of the Peace River in that area and the potential sloughing could be very detrimental both to aquatic life and people downstream. It is important to note that the Peace River is the soul source of drinking water for the town of Taylor. Twenty five years ago there wasn't much thought given to what people put in the dump and all of that would have leached deep into the soil over the many years. There will also be many issues to deal with such as very high levels of water turbidity which will last at least for the duration of construction. Massive filtration systems will need to be set up, at BC Hydro’s expense, to mitigate for this turbidity.
In addition, there is the cost of upgrading the transmission lines to the South, which is a necessity if Site C were to proceed. This cost has also not been included in BC Hydro’s rough estimate. BC Hydro has justified not including this cost by saying it would be a cost associated with BCTC as opposed to BC Hydro... that justification can be thrown out the window now that BCTC and BC Hydro are due to be amalgamated again. It’s an interesting game the government and BC Hydro play.
This BC Hydro Stage 2 Report also states
"While it is possible for BC Hydro to produce a cost estimate based on the 1980s design, it is not prudent to do, since potential design changes resulting from optimization would impact the capital cost estimate. Providing for these potential design changes at this point may produce a cost range that is so variable it would not be meaningful to decision makers.”
which can be read as saying the current cost estimate is beyond meaningless and they have no idea at this point how much it will really cost. However, the timing has proven to be quite convenient, allowing the government to make the decision to proceed with the project based on the admittedly rough, low-ball estimates. More meaningful and significantly higher cost estimates will not be revealed until BC Hydro is already well within Stage 3 of the five stage process. Most convenient indeed.
And to think... this is not even including the interest that would be incurred on such a massive loan.
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