Winnipeg Secures $28 Million Settlement from Contractor Over Police HQ Controversy

📅 5 days ago

Winnipeg has received a $28 million payment from contractor Caspian related to the Police Service Headquarters project, marking the culmination of several payments totaling nearly $30 million as the city recovers losses from a contentious project that exceeded its budget by over $70 million.

WINNIPEG — The City of Winnipeg has successfully secured a payment in trust of $28 million from Caspian, the contractor involved in a fraudulent lawsuit linked to the Police Service Headquarters project located at 245 Smith St. This payment, contingent upon resolving the trust conditions, represents the final installment in a series of payments totaling approximately $29.67 million made to the city over the past few years, as reported in an official release. Mayor Scott Gillingham expressed his satisfaction with the outcome, stating, "Nearly $30 million has now been recovered for Winnipeg taxpayers, which is a major win for our city. This outcome shows that pursuing this matter was the right call. I want to thank the city’s legal team and staff across the organization who worked for years to see this through. Their persistence delivered real results for Winnipeggers."
The Police Service Headquarters project, which was completed in 2016, faced significant financial overruns, ultimately costing more than $70 million beyond its original budget of $135 million. Controversy has surrounded the project, particularly following a civil court ruling in 2022, which found that Phil Sheegl, the city’s former chief administrative officer, had accepted a bribe of $327,000 from Armik Babakhanians, the owner of Caspian Projects. Although the Royal Canadian Mounted Police (RCMP) conducted an investigation into the matter, no criminal charges were filed. Sheegl contended that the funds received from a Caspian executive were related to a separate real estate transaction in Arizona. He appealed the civil court ruling but was unsuccessful.
In response to the controversies surrounding the project, a public inquiry was initiated earlier this year, with the province approving $2.3 million to support its operations. This inquiry is expected to continue until June, as it seeks to uncover the full extent of the issues that plagued the Police Service Headquarters project.

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