Ontario Power Generation (OPG) has awarded Strabag AG a contract to design and construct a new 10.4km long tunnel to supply additional water from above Niagara Falls to the Sir Adam Beck power plant at Queenston Heights, Canada.

The Niagara tunnel will supply 500m3/sec of additional water to the power plant and will enable energy output from Sir Adam Beck to increase by an average of about 1.6TWh/yr. Construction is expected to start this September and be completed by late 2009.

The value of the design/build contract for the Niagara tunnel project is approximately $600M, and the total project is expected to cost about $985M. In addition to the design/build contract, this estimate includes:

• Cost of remedial work at the retired Ontario Power and Toronto Power power plants at Niagara Falls as part of their reversion to the Niagara Parks commission and agreement on the long-term disposition of water rights for use in the new tunnel.

• Cost of satisfying the conditions of the project’s Environmental Assessment approval.

• Cost of retaining an external consultant with international tunnelling experience as the owner’s representative to review/monitor the design and construction activities on OPG’s behalf.

• Cost of a comprehensive insurance program.

• Interest cost during construction.

• Contingency to cover unforeseen circumstances.

OPG undertook an international process to select the successful contractor – three pre-qualified consortia submitted design/build proposals in May 2005 and, following review, the proposal from Strabag AG of Austria was selected.

Strabag AG will be supported by ILF Beratende Ingenieure of Austria; Morrison Hershfield of Toronto; Dufferin Construction of Oakville and several other local subcontractors. The Province of Ontario has committed to provide OPG with the required financing for the project.

About 80% of the total project construction spending is likely to be in Ontario. This includes construction labour, engineering and technical support, supply of construction equipment and other related services/materials.