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Canada: The government buys pipeline at a high price, says official report

The Canadian government of Justin Trudeau paid a high price when nationalizing the controversial Trans Mountain pipeline last year for $ 4.4 billion (2.9 million euros), according to a report from a public accounts auditing agency released on Thursday.

In front of the bottlenecks in Canada's oil channels and the uncertainty in the oil industry, in August 2018, Ottawa bought the American gas pipeline Kinder Morgan linking the oil fields of Alberta to the Pacific coast, across the rocky mountains.

1,200 km long and currently saturated, the capacity must be tripled, up to 890,000 barrels of oil per day, according to an expansion project. However, the work was slow to begin due to a court decision and strong opposition from a part of the Western Canadian population.

In its report "Trans Mountain Pipeline of Canada: Financial and Economic Considerations," the Office of the Parliamentary Budget (PBO, an independent public official that offers Parliament a permanent audit of public accounts) estimates that the value of the pipeline is between "$ 3.6 billion and $ 4.6 billion. "

"The Government of Canada paid $ 4,400 million, which is at the top of the gas pipeline range according to our analysis," said PBO Yves Giroux.

The expansion was valued at C $ 7.4 billion in 2016, excluding the purchase of the existing gas pipeline, but the PBO estimates that the new pipeline "would cost $ 9.3 billion to be built and would come into service on December 31, 2021."

At the end of August 2018, the Canadian judicial system sent to this project, which was strategic for the Trudeau government, because it did not sufficiently take into account the fears of the indigenous groups of the region, its environmental consequences, in particular marine fauna.

Ottawa announced in October that he would consult again with the aboriginal communities concerned, hoping to resume work quickly.

"Any delay in construction or any increase in costs will have a downward impact on the value of the pipeline," warned the PBO.

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