TORONTO - The fight over an $81-million energy centre that was built by Ontario's troubled lottery corporation to power a Windsor casino got uglier both inside and outside the courtroom Tuesday as new questions emerged about the plant's true value.
A confidential study that assessed the plant's value said it could be worthless or fetch up to $60 million, but the government is trying to recoup some of the money it spent to build it, said Finance Minister Dwight Duncan.
"Bottom line, we are going to court to protect the interest of Ontario taxpayers in this," said Duncan, who took over responsibility for the Ontario Lottery and Gaming Corp. five months ago.
The OLG is countersuing the companies that designed, built and operated the plant -- until recently -- for $60 million.
The counterclaim comes in response to Buttcon Energy's $355-million lawsuit against the OLG, its former CEO Kelly McDougald and current OLG executive Larry Flynn, alleging breach of contract, abuse of power and other claims that haven't been proven in court.
The OLG denies Buttcon's allegations and any claims for compensation in its statement of defence and counterclaim filed with the Ontario Superior Court of Justice on Nov. 10.
It alleges that Buttcon breached the terms of its agreement by failing to properly design the plant, which the OLG claims cannot be safely connected to the local power grid.
The court documents also reveal that the troubled lottery agency harbours little hope of getting what it paid for without sinking more money into the plant.
"As a result of Buttcon's improper design of the energy centre, large portions of it will have to be redesigned and constructed," the OLG said in its statement.
"Equipment will need to be replaced and/or reconfigured. Even with the redesign and reconstruction work, as a result of problems created by Buttcon's design, the energy centre will be unable to operate in an efficient, cost-effective manner."
Duncan said he can't determine whether taxpayers' money was wasted on the plant -- dubbed "Dwight Elephant" by the Opposition -- which came in way over its initial $40-million budget.
"Let me just say, I find the whole set of circumstances around its creation rather bizarre," he said.
A government source said there were serious problems with the energy centre from the beginning.
According to court documents, the OLG put out a contract for the design and construction of the plant in September 2006.
It decided a separate energy centre was needed for heating, cooling and "standby electrical needs" of a multimillion-dollar expansion of Caesar's Windsor that began in 2005.
Duncan, who represents a Windsor riding, has come under fire in recent months over the soaring cost of the plant, which ended up being built on top of a parking garage.
Provincial auditor Jim McCarter needs to investigate why the OLG got into the energy business in the first place and spent millions of taxpayers' dollars on a plant in senior cabinet minister Sandra Pupatello's riding.
"It's certainly worthy of a very, very serious look, because the abuse of taxpayers' money just goes on and on with this government," said Tory critic Peter Shurman.
Currently, the plant supplies hot water, cooling and backup electricity to the expanded casino facilities, which includes a hotel tower, convention areas and entertainment centre, according to court documents.
The machinery that was bought to generate electricity isn't operating because it hasn't been commissioned or hooked up to the local electrical grid, the OLG stated.
