City of Vancouver on hook for $10 million cost of capping massive groundwater leak

An Italian company and its two principals are facing four charges each for the breach of a massive aquifer on a residential construction site in Vancouver’s Kerrisdale neighbourhood in September 2015, a breach that has cost the city more than $10 million to fix.

Neither Armando nor Tommaso Mascetti nor any representative of their company Geoenergia Projects (Canada) Inc. showed up in provincial court last week.

And they’re not expected to show up on Feb 13 for their next appearance. They shut down operations in the Vancouver area soon after the 2015 breach and are believed to have gone back to Italy.

“The driller was unable to stop the flow of water, left the job, took his equipment and left,” said Vancouver’s deputy city manager Paul Mochrie.

“There was no contract in place between the owner and the driller…the company took off,” Mochrie said.

The charges were laid under B.C.’s Water Act because groundwater falls under provincial jurisdiction. They carry possible penalties of $200,000 and/or six months imprisonment.

Three years after the breach, the bills have come in to the city and no-one has been held responsible: not the drillers and not the owner of the Beechwood Street property, Lin Liu.

Liu had been attempting to build a large house with a geothermal heat exchange system when the incident occurred. He hired Geoenergia to do the work.

To access geothermal energy to heat air and water, pipes must be buried deep to harness the heat from the ground.

The breach caused extensive damage, Mochrie said.

“It’s the first case we’re aware of in the province…of this magnitude in a densely populated urban area.”

The City of Vancouver hired contractors to resolve the problem and contain the pierced aquifer that was gushing about two million litres of water a day for months.

The province alleges that the company hired to install the geothermal heat exchange system was not qualified to drill.

It also claims the company destroyed or tampered with an artesian well (aquifer) after its mistake, failed to stop the flow of water or engage qualified professionals who could have stopped it.

Crown prosecutor James Cryder told CBC the case “will likely bump along,” and warrants may be sought. But ultimately, all the province can do is ensure the company doesn’t again work in B.C.

Following the breach, several wells had to be drilled to relieve pressure and cap the original drill hole that caused the uncontrollable leak. The final seal on the aquifer was done in July 2017, nearly two years after the breach.

The lack of data about underground conditions at the site resulted in a long and costly process to cap it, Mochrie said.

The final two-year monitoring period expires in September.

While the province pursues the drillers, the city of Vancouver argues that the homeowner is ultimately responsible for the cost of fixing the damage.

It has slapped $4 million on the tax bill for the Beechwood property and filed a lawsuit against Liu in October for $6.5 million more.

Missing owner
But, it’s been well over a year since there was any contact with the owner, according to Mochrie.

“We’re not sure where he is,” he said.

The last time the regular property tax bill was paid was 2016. It has also now been assessed for vacancy taxes of $43,000.

“The property could be sold for taxes as soon as next November, if the owner does not pay the arrears,” said city spokesperson Jag Sandhu in a statement to CBC.

Liu remains the owner of the property, now assessed at almost $2.7 million in provincial records. Court records show that he was also being sued by CIBC for defaulting on the mortgage of more than $1.7 million and other companies for non-payment.

But the City will have first dibs on any money from the sale of the property, if it happens.

CBC News has not been able to reach Liu. His legal address for the Beechwood property is on Edgar Crescent, but the man who answered the door said his wife owned the property and he had no idea who Liu was.

A lawyer involved in one lawsuit told the CBC that he has never seen Liu or any lawyer representing him. ​

Geothermal company claims experience

Geoenergia claims on its website that “Mascetti Group is a leading company in the field of drilling and underground engineering” with over 100 employees.

It also claims to have designed and built geothermal projects all over Italy for public and private buildings — with 30 years of experience. The site describes Armando Mascetti as an engineer.

The Vancouver office was opened in 2013 and was supposed to be the company’s international headquarters but it was shut down soon after the breach. The Italian Chamber of Commerce in Vancouver, where it was a member confirmed the shutdown.

The CBC has been unable to get any comment from Geoenergia or the Mascettis despite several attempts.