Long-term planning and the development of risk management practices are required if the Department of Highways and Public Works expects to maintain safe, economical and efficient infrastructure and buildings, states a report released this morning by the Auditor General of Canada.

'The department has a major responsibility to ensure safe and efficient public highways, bridge, airports and buildings in the territory,' Auditor General Sheila Fraser told a press conference at the legislature building.

'To do that properly, it will need to improve its management practices.'

The 35-page audit states Highways and Public Works has no documented profile of the risks associated with major infrastructure projects; many projects go overtime and over-budget; proper reviews of infrastructure projects are not conducted to see if procedures were followed and objectives achieved; there is no long-range plan for identifying government office space needs; a high percentage of government office space is leased through short-term sole sourced contracts; and there is no up-to-date information on the condition of government buildings.

'Managing real property and developing and maintaining safe transportation infrastructure calls for long-term planning if they are to be done economically and efficiently,' said Fraser. 'Risk management is also essential that is, anticipating what could go wrong and preparing for it.

'We found that the department needs to improve both its long-term planning and its risk management practices.'

The report, entitled Transportation Capital Program and Property Management: Department of Highways and Public Works, examined approximately the last three years.

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.

'Several bridges are deteriorating and could become unsafe if not dealt with,' said Fraser. 'The department lacks effective long-term maintenance and replacement plans for highways and bridges.'

Highway pavement in the Yukon is averaging 20 years of age and is need of major reinvestment to halt its 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.

Of the 12 infrastructure projects examined in the report, eight exceeded initial cost estimates.

'We know there are major differences between initial estimates that have been given before going out to tender and then the cost of projects,' she said.

The department needs to assess why that is occurring, added the Auditor General.

'It doesn't necessarily mean the final cost is wrong. It could be that the initial estimate is wrong or a combination of both.'

She further added design changes made in the department after a project has already started are another factor in increased costs and delays.

The report also expressed concern many projects commenced prior to contracts being signed in many cases.

'When projects begin without contracts in place, it can put the government at risk, because the roles and responsibilities of various parties are not set out,' said Fraser. 'There can be dispute about what contractors are supposed to do and at what cost and it's really kind of an unnecessary risk to take.

'Contracts should be in place before work begins.'

Addressing the needs of government office space and buildings is also discussed in the report.

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

The government does not have an inventory of the space it occupies and the quality of the offices varies greatly, it is further stated.

This is another area that needs a long-term plan, said Fraser.

The report also drew reference to the number of leases given out on a sole-source basis.

'We would expect there would have been more tendering done. If you look at the examples we looked at, almost all of them were done on a sole-sourced basis,' said Fraser.

'I think there's sort of a general acknowledgment that the only way to test a market is to go out to competitive bids. Is that an absolute guarantee that you're going to get the very best price? Not necessarily, but it's very difficult to find another process that will assure you of that.'

Short-term leases are not always the most economical solution, said Fraser, and long-term leases may cost the government more than constructing or purchasing a building. Adequate analysis of the options available has not been conducted by the government.

The Department of Highways and Public Works has responded to the report and agreed with all of the recommendations put forward.

'I think it will be really up to the department how they will address that going forward,' said Fraser.

Highways and Public Works must now be asked how it expects to address the issues, she said, and should present an action plan and timeline to the legislature and public.

'They need to get the information together and they need to develop a plan.'

The reality, however, is that the situation cannot be corrected or dealt with in its entirety immediately, she added.

'It's a question of gathering information and setting priorities.'

Hearings of the Standing Committee on Public Accounts dealing with the audit are scheduled for Feb. 7 and 8.

Yukon Party spokesman Albert Petersen said this morning cabinet will not be making comment on the audit until following those hearings so as to not interject political opinion into the audit.

Meanwhile, Liberal MLA Eric Fairclough stated the report shows the Auditor General as giving the Yukon Party government a failing grade.

'I don't believe attention was paid to the completion of projects,' said Fairclough. 'It kills the government saying they are good fiscal managers.'

The audit is the first of several addressing priority areas in the Yukon that will be released over the next number of years, said Fraser.

The next audit will be regarding the 2007 Canada Winter Games and some of the infrastructure built for it, she said. It is scheduled to be released this fall.