Ottawa may have overpaid for Trans Mountain by up to $1B, parliamentary budget officer says

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The federal Liberal government may have overpaid for the Trans Mountain pipeline project by up to $1 billion, the parliamentary budget officer estimates, and there’s a risk its value could decline further if there are any other delays in the building timeline.

However, even if Ottawa paid too much, the value of the project for Canada’s oil producers, and in turn government coffers, is considerable as it will close a price gap that plagues the oilpatch, the Parliamentary Budget Office said in a report released Thursday.

The report says both the existing pipeline and the proposed expansion project are valued at between $3.6 billion and $4.6 billion, an imprecise range that pegs it at either well below the government’s purchase price — $4.5 billion — or right on the money.

“The government negotiated a purchase price at the higher end of PBO’s valuation range. PBO’s financial valuation assumes that the pipeline is built on time and on budget.”

Read full article here.

John Paul Tasker – CBC News – Jan 31, 2019.

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