Winnipeg’s former chief administrative officer returned to the hot seat Wednesday, testifying for the second day at the public inquiry into the Winnipeg Police Service headquarters project.
Sheegl served as the city’s top bureaucrat as it negotiated construction contracts associated with the project, which ultimately exceeded its budget by nearly $80 million.
While speaking to the inquiry panel Tuesday, Sheegl acknowledged he was in a conflict of interest due to a private business deal he arranged with Caspian Construction owner Armik Babakhanians, who won the bid on the project.
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Phil Sheegl’s testimony marks the first time he has spoken publicly about the headquarters project since leaving city hall in 2013.
“I completely acknowledge today that it was a conflict. At the time, I did not realize,” Sheegl told inquiry counsel Heather Leonoff Tuesday.
Sheegl’s testimony marks the first time he has spoken publicly about the headquarters project since leaving city hall in 2013. He is the only witness slated to speak Wednesday, and began the morning fielding more questions from Leonoff.
She has submitted dozens of emails exchanged between Babakhanians and Sheegl as evidence.
The men were in frequent contact while Caspian was bidding on and after securing the headquarters contract. Some of those messages were sent to Sheegl’s city email address, while others were sent to his private account.
Sheegl has said he grew frustrated with Babakhanians, who frequently complained about other people and companies involved in the project.
“It took a lot of time and a lot of effort from a lot of people, at the city, I mean, to respond to these emails,” Sheegl said Wednesday. “It becomes a very, very time consuming event.”
In one exchange, Babakhanians complained about accounting practices he was expected to follow during the project.
Caspian and the city had negotiated a guaranteed maximum price of $137 million in the construction contract.
“Now at the last minute, we are being forced to provide extremely redundant non-industry standard accounting practice for this application. The whole purpose of rolling this into a (guaranteed maximum price) is so that we can go away, build the project and hand you the keys,” Babakhanians wrote.
Leonoff has repeatedly asked Sheegl whether he advised Babakhanians to “low ball” estimated costs while bidding on the construction contract.
Sheegl said they never discussed anything along those lines.
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The inquiry panel previously heard the project encountered price overruns, in part, due to change orders from the Winnipeg Police Service.
Despite some concerns, Sheegl said he and others at the city felt Babakhanians was a competent contractor and Caspian was the right company to complete the project.
“We’re not looking at this with questioning eyes, or through that lens,” Sheegl said.
More to come
tyler.searle@freepress.mb.ca
Tyler Searle is a multimedia producer who writes for the Free Press’s city desk. A graduate of Red River College Polytechnic’s creative communications program, he wrote for the Stonewall Teulon Tribune, Selkirk Record and Express Weekly News before joining the paper in 2022. Read more about Tyler.
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