Skookumchuk Pulp Mill Expansion and Digester retrofit
Client: Crestbrook Forest Products
The Set Up
I was 30 years old and a field superintendent for a company called JK Campbell and Associates. I had one decent size job prior to this one where I was General Foreman. The company department manager was impressed with my performance as general foreman so it was decided to set me up as a field superintendent on Skookumchuk.
The General Superintendent, called me into the Calgary office and asked if I wanted to hear the good news first or the bad news first. I told him to give me the bad news first.
THE BAD NEWS
The company had estimated a project at the Skookumchuk pulp mill. Somehow they failed to see a terrible estimating error and I was told the labour estimate was under bid by 50%. They were low price on the project so CFP awarded the job to JK Campbell and Assoc.
THE GOOD NEWS
The general superintendent decided that he didn’t want this job to tarnish his image so he talked the manager into giving me the job of project superintendent. The other good news was the project was to mobilize in mid November and estimated to be completed by Christmas. Seven weeks to complete a project that was based on a 50% labour estimate shortage.
In other words, the office felt the job at best would be completed in seven weeks but in reality, the project would extend into February. That would be a lot of money lost and probably a termination to go along with the project.
This is a prime example of the projects I got to manage. Lots of underbid projects and people who could use me as their scapegoat. It was a very subtle form of discrimination, but if you were me, you would just accept the project and move forward. I wasn’t about to go back on the tools and follow others who continually screwed up.
All I could do is go through the estimate with the estimators and find out where the problems were and try to formulate a plan to execute with the least number of missteps.
What the companies did not know about me was my vast work history and willingness to analyze projects big and small from afar as well as determine what caused projects to fail or not make the expected profits. This information I always kept to myself until I was able to share my knowledge with peers that I trusted or respected. My analyzing was due to the way my father and father in law approached their work and the discrimination they and I had to deal with. And truthfully I did not appreciate being passed over for foremen or job leader positions and watching other people give less than their best to complete the work.
One of the initial problems other than being under bid was the location of the project. This was a project in BC and the unions detested out of province contractors taking work away from their BC contractors. The unions would always dispatch their most notorious and sometimes overly aged workers and radical job stewards to the project in the hopes of driving the project into further losses. In this way, the union hoped the next projects would be estimated based on the outside contractors’ bad experience, thus driving their estimate upwards and making the outside contractor less competitive.
The general Superintendent and his long time GF had been burnt on an earlier project in BC and they knew what I was up against but didn’t tell me at the time.
When I mobilized in Skookumchuk, I did have a very capable foreman from Vancouver. Don told me on the Skookumchuk site what we were going to get from the union, which put my focus on the estimate and the methods we would use to circumvent the labour problem and still attempt to achieve the estimate.
The digester is a very large vertical vessel, approximately 40’ at the base and 240’ tall where the wood chips are cooked in steam and acid to break down the wood fiber. Our job was to re-clad the vessel and piping, which has been insulated years earlier. When we walked the job, it was not an insulation I was used to seeing. This was sprayed on urethane foam insulation with an elastomeric outer shell for weather protection. The insulation was never capable of handling the heat and it expanded and swelled to the point where the elastomeric coating was cracked and distorted. It would be impossible for our manpower to put a permanent metal cladding over top as the surface was completely distorted.
I knew I was in for some bad times. I sat down after the first evening on site and started to think about the problems any good tradesman would have with this behemoth of a vessel, never mind the dregs we were about to get from Vancouver. The next day I did something that I eventually did on all my union projects.
I called the union Business Manager in Vancouver and introduced myself over the phone. This tact was boo hooed by my manager and general superintendent but it served me well and it threw the Business Manager a curve ball.
Never in the history of this Business Manager’s tenure did an outside of BC field superintendent call on him. He was used to dealing with the company owner, but as per the usual, I got a blast right off the get go about being an outside of BC contractor and that I should pack up and go home. I listened and waited my turn, explained my labour relations philosophy, respect for the workers he represented, discussed manpower quality and what his people would be up against.
We hammered out the ground rules but never sure if either of us would hold up their end. One thing for sure, the Business Manager knew this was my project, not his and I wasn’t going anywhere.
The second part of the salesmanship was to discuss my dilemma with the project engineer and Contracts Administrator. Lucky for me, I had found out earlier in Calgary that CFP did not require a site visit prior to entering a bid. I sat down with a silver haired man, who in turn became a true supporter of mine throughout the project. After a field demonstration to identify the problems with the current contract scope of work; we sat down and determined the best way to solve an ugly problem.
Manpower was arriving on the job and there was no work available. To get the ball rolling, we started to strip existing digester piping. The piping would then be re-insulated with proper materials and clad while a decision would be made on the digester scope of work. The piping materials had to be ordered and shipped so the front end days were just to keep the men busy. The new piping in the contract was not ready to be tested and turned over so this work was important to me. This was on a cost reimbursable contract so there were no estimate required. We supplied the labour and materials to re-do the piping. Because the cladding was in the original bid, we doctored the insulation pricing in our favour and charged out accordingly. But I wasn’t done yet.
To keep the CFP engineer off balance and busy as to avoid too much focus on the extra work, I started on a safety campaign. This also started to get the union labour on side.
THERE IS NO ARGUMENT< SAFETY PAYS
There is a real toxic side to the pulp and paper industry. The products used to break down wood fiber are very toxic and acidic. In my album are pictures of handrails that are completely rotted off as well as damaged scaffolding from dripping “black liquor”. Also there are stack plume pictures that were taken to identify the release of sulphur dioxide with the steam. Someday I will enter these pictures into the story.
Stack Plume or Emissions
Whenever the wind changed and came directly at the digester, workers were being poisoned with this suffocating yellow gas and steam. The other problem was the stack height. We were working from ground level to far above the stack plume, so a change in wind could trap workers above or below the plume.
To evacuate the digester, the manpower had to egress down stairs that held the rotten handrails. One of my first extra charges on the project was to halt the job on behalf of all the workers and declare the stairs on the digester unsafe. This put the workers on the clock and BC OH/S officer in my face. But I had done my homework, taken pictures and prepared my case. Soon the carpenters were busy installing scaffold to shore up the stair rails. This did not solve my stack emissions issues but at least the workforce did not have to worry about a handrail giving way as they accessed or egressed the digester.
Many workers got sick inhaling the steam and sulphur dioxide a regular basis. We had to put a triage nurse on site to manage the sick workers and determine if they required hospitalization. I charged CFP for lost productivity for every man who was affected by the emissions. I went further and charged out the balance of the crew because I stated the entire work program was adversely affected with the loss of these men. I coached the foreman and cushioned the hours in our favour. Due to this lost time being an unrecognized safety issue, the client was obliged to pay. And there is a built-in profit margin for lost time, so I was actually gaining in dollar recovery.
Safety equipment had to be brought in as a safety measure, including egress packs, gloves and disposable suits. These were not in the original estimate so they were charged out as extras and a solid mark up was added. But this is where I got to see whom I was working for. The Calgary office was constantly asking for updates and progress on the contract.
Two weeks into the project, I have fired at least ten union workers, got the union phoning the Calgary office, not installed a piece of material and paying a crew of fourteen ten hours a day plus weekends at double time. The office manager was ready to pull me off the project but he also had a big decision on a different project that required his key personnel to manage. I prevailed and was left to sink or swim.
Later in the project, when the new piping and equipment were being commissioned, we ran into similar problems. But the trail was already well worn and we continued to submit extras for lost time and other incidentals. By now the foreman didn’t need any coaching. He was building stories and justifications as well as I could. The union labour, after just three weeks fell into line and really began supporting the project. They then became self – policing and recognized that I was as good as my word and respected the up front deal with the Business Manager.
PROBLEMS AND MORE PROBLEMS
The weather was becoming an issue. The colder it got, the slower the workers became. Those who have dealt with BC labour know that they will work in a monsoon but snow and ice; that is another matter. The steam in the surrounding area was coating all metal with either hoar frost or huge icicles . Moving of materials up and down the digester became a real headache with limited visibility due to steam leaks and the plumes of poisonous gases continued unabated. But we continued to charge out lost time tickets and we were getting paid.
There are pictures of new stainless piping installations in the photo album. In most of those pictures, you can see the plant in upset mode as they tried to get the process in synchronization . The vents are spewing froth, black liquor and steam. This was at boiling temperatures and workers never knew when an upset was coming. However, they soon learned the tell-tale signs.
There was one black liquor spill that lasted for days and could not be contained. The black liquor went over a half mile on frozen ground and dumped into the Skookumchuk creek and then into the Kootenay River. The water on the mill side of the river went from pristine green to a milky white. It remained that way for over three months as the black liquor made its way to the river. There is a picture in the album of the liquor trail as it melted through eight inches of ice in the plant on its way to the river.
NEGOTIATING< THE ART OF GIVE AND TAKE
By week five or six, I was seeing tangible returns on the project. The company was happily invoicing for all my extra charges. But the issue with the digester cladding had not yet been resolved. The project engineer had to get owner approval for the added extra cost. I assisted the engineer in building a case for total insulation removal, re-insulation and cladding of the digester. The plan was not focused on the up front cost as such but the amortized return and extended life of the digester for CFP in the long run.
I also encouraged the engineer to explain to CFP that our efforts to date went well beyond what would normally be considered contractually acceptable and we were all in the same boat, paddling in the same direction.
The End Result
At the end of the seventh week, we were right up against Christmas break. I had not reached the estimate milestones but was informed that if the project ended that day, I would have made costs for the entire project. My extra charges had pulled this project back into focus and profitability. Before I left for break, I took a letter from CFP back to Calgary. This letter was an order to strip and re-do the entire digester on a unit price basis after stripping at cost plus. The order was of equal value to the original bid package.
The men on site were ecstatic as we discussed Christmas break and the additional work. This was something I had promised them from the onset. As tough as the work was, they wanted to see the project end on a good note. I had treated all of them with respect and they all looked forward to completing the additional work in the New year.
I completed that project eleven weeks after the Christmas break. I kept pounding CFP with extra charges every time we were impacted. Project wide, the job made an 18% overall profit margin, overcoming all the shortfalls, much to everyone’s surprise.
The Fall Out
JK Campbell and Associates had extended themselves too much and were in financial difficulty. My original department manager and the Skookumchuk estimator all left with the general manager and set out to build their own company. A junior estimator was promoted to be my department manager. When I was being groomed for Skookumchuk, JK Campbell and Associates had bid a huge asbestos abatement project for Saskatchewan Power in Estevan Sask. ($899,000 lump sum)
My general superintendent chose to take this project as project superintendent with his trusty general foreman. He had explained on the day of the Skookumchuk set up that the new general manager added 200K dollars to the original bid and JK Campbell was still low. He told me he had nothing but money in his project and that was going to make a slam-dunk project.
One of the first things I learned watching the performance of other superintendents and foremen was to listen. I always watched to see why they had a reputation, good or bad and what they did to be successful or failures. One failure was over confidence, which my general superintendent had. The other was drinking under pressure and not taking control of oneself. My general superintendent thought he had lots of money in the Estevan estimate so he decided the project would manage itself. He spent a lot of time with a company expense account trying to make friends in bars. The last and most important failure amongst many was not keeping a good diary and noting details of work, conditions and conversations, etc.
This came to a head over a year and a half after Skookumchuk. JK Campbell was put into receivership. The Estevan budget was over a million dollars in the red; the general superintendent was divorced and I am sure, close to being an alcoholic. That project was the death – blow for JK Campbell and Associates. I did two other projects for JK Campbell during the receivership that I may write about later.
Skookumchuk is still operating today under different ownership and the digester and expansion are still making pulp.