According to witnesses appearing before the standing committee on public accounts in the legislative assembly today, marketplace trends and competition are major factors in the shortfalls highlighted in the Auditor General of Canada's report on the Department of Highways and Public Works.

'These problems are not unique to the Yukon,' said Robin Walsh, the department's director of transportation engineering.

The 35-page document entitled Transportation Capital Program and Property Management: Department of Highways and Public Works was personally released by Auditor General of Canada Sheila Fraser last Friday in Whitehorse.

It shows the department is chronically overtime and over-budget on infrastructure projects and tends to use short-term, sole-sourced leases for government office space.

The department spent $60 million in the 2005-06 fiscal year to develop, construct and maintain the territory's infrastructure, which includes highways, roads, bridges, airport and airstrips. Another $52 million was spent on the development, leasing, operation and maintenance of government buildings.

The report, however, found the department needs to make a major reinvestment in highways and bridges if their deterioration is to be halted and their conditions brought up to standard.

The report also stated that no evaluation has been done of government buildings and short-term leases are not always the most economical solution but no analysis of the options available have not been conducted by the government.

Walsh told committee members that oil prices have driven up costs of infrastructure in the territory.

'(The report's findings) have to be put in the context of the current construction environment,' said Walsh. 'Prices in Yukon and western Canada have increased significantly.'

This has impacts on bid prices appearing for projects, he said.

The audit showed, of the infrastructure projects examined, some exceeded original cost estimates by up to 69 per cent.

'We know there are major differences between initial estimates that have been given before going out to tender and then the cost of projects,' Fraser told a press conference last Friday. The department needs to assess why that is occurring, she said.

Yukon Party MLA Steve Nordick told the witnesses the problems with project management in the territory appear to be systemic, based on the findings of the audit.

But there is currently less competition for contracts in the territory, said Walsh, adding that some projects only receive one bid. That leaves fewer options for competitive prices.

'We have to be more aware of market trends,' he said of the department's plans to address the shortfalls of project estimates. 'We have to be more rigorous in the process of estimating.'

Robert Magnuson, assistant deputy minister with the transportation branch, further added part of the problem is some estimates can be several months old by the time a project starts.

With the current fluctuations in the marketplace, that can have a large impact on the final costs, said Magnuson.

'We need to spend more time and find better ways to put these estimates together,' he said.

Magnuson also reinterated that it isn't a problem just faced by the Yukon. 'This is being looked at across the country.'

Steven Gasser, assistant deputy minister in the property management agency, also stated the current booms in western Canada have created challenges for the territory, referring to shortages of project managers in the Yukon.

'Project managers are very difficult to come by,' said Gasser.

The skills and training needed to hold the position of project manager are being sought after throughout much of Alberta and British Columbia, in addition to the Yukon, he said.

It makes it difficult for the government of the territory to compete against large private business to provide appropriate compensation to attract the workers, he said.

'Mainly what we need to do is prioritize our work and train our staff.'

But when it comes to issues relating to property management and the government not knowing how much space is in its own buildings, or their condition, Gasser said it is the fault of a lapse in planning that occurred almost 15 years ago.

The report stated: 'We found that there is no long-term strategic approach to identify and meet accommodation needs and no long-range master plan for acquiring and allocating space.'

'In addition, this directive has been subject to different interpretation and application and is not being followed consistently.'

An accommodation plan was not being delivered for the last many years, agreed Gasser.

'It's going to take a bit of time to correct,' he added, estimating that it would take up to a year for any changes to be seen and closer to five for anything to be resolved.

The government has worked on a 'one-off' type of planning process when it comes to office space, he said, working on a case-by-case basis.

'I'm not sure why over the last 10 to 12 years the department has not been engaged,' he said. 'We need to get the system back in place.'

Gasser agreed it is the lack of a long-term plan that has allowed the situation to reach where it is today.

However, he further added that the department does not have enough resources to be able to inspect the buildings on a regular basis.

The three major challenges in relation to government buildings maintenance and office space planning have been a lack of data, lack of documented procedures and a lack of resources to do the work, he said.

Despite the findings, Walsh said the territory's infrastructure, which includes highways, roads, bridges and airports, has not been neglected during the three years the report examines.

Highway pavement in the Yukon is averaging 20 years of age and is need of major reinvestment to halt their deterioration, notes the report.

Approximately $3 million annually would be needed just to maintain the present pavement conditions with more funding required if their overall condition is to be improved.

A third of the Yukon's bridges were also found to be constructed more than 40 years ago. Estimates suggested that as of 2004, 29 of the 129 bridges in the territory were found to be unacceptable and requiring immediate rehabilitation to bring them up to minimum standards.

'We get the sense that much of this is done on kind of an ad hoc basis in response to breakdowns or kind of a reactive, emergency situation. There needs to be a longer-term plan that is presented,' Fraser said.

Walsh told the committee: 'I would say we have monitored the condition of our infrastructure.' He further added any safety concerns are addressed through maintenance.

The major focus of the audit is the lack of long-term planning or risk management practices present in the department.

The public hearings on the findings of the audit will conclude this afternoon.