New OLG woes: casino construction surcharges

There's more dirt today on the Ontario Lottery and Gaming Corporation - this time it's construction dirt.

The Toronto Star is today disclosing new concerns about the bidding practices of a general contracting company retained to build two OLG projects worth $30 million.

The newspaper is reporting that OLG has stopped payment on and launched an audit of $2 million in surcharges on construction deals with Govan Brown & Associates

The company has been contracted to expand casino and slot machine properties in Brantford and Ajax.

It has been instructing its subcontractors to include a 7.5 percent surcharge in bids for such things as site cleanup.

The Star obtained bid documents and contacted the subcontractors named in the documents.

One subcontractor contacted told the newspaper that it included the site cleanup surcharge in its bid, cleaned up the site and never got paid for it.

OLG says it never approved the surcharges and became aware of them in July, says the Star.

OLG immediately began a review and met with Govan Brown officials on August 21 to tell them payment was stopped on the cheques covering the $2 million in surcharges.

Work will continue on the projects.

The Star says that Govan Brown's chief financial officer welcomes the audit, arguing that it it will prove the company adheres to high standards for ethical practices and transparency.

To read the Star's full coverage, please click here